Private equity inflows in Indian real estate fall 15% to $2.2 billion in H1 2025

Private equity inflows in Indian real estate fell 15% to $2.2B in H1 FY26 as fewer deals closed, though average deal sizes and foreign interest stayed steady

Private equity (PE) investments in India’s real estate sector fell 15% year-on-year in the first half of FY26, reaching $2.2 billion, compared to $2.6 billion in the same period last year, according to ANAROCK Capital’s FLUX report. The report noted that deal activity remains lower, mainly due to fewer transactions, even as the average deal size stayed steady between $60 million and $100 million.

Private equity investments in India’s real estate dropped 15% YoY to $2.2 billion in H1 FY26, mainly due to fewer deals, though average deal sizes remained $60–$100 million, says ANAROCK. (Picture for representational purposes only) (Mehul R Thakkar/HT)

Shobhit Agarwal, CEO of ANAROCK Capital, said that while Q1 FY26 showed some promise, momentum faded in the next quarter. “A stronger deal showing in Q1 appeared to present a glimmer of hope, though it was short-lived as activity subsided again going into the second quarter,” he said. Agarwal added that PE inflows have been gradually declining from a high of $6.4 billion in FY21 to $3.7 billion in FY25.

Deal concentration eases, regional shifts emerge

The report pointed out that the share of the top 10 PE deals dropped from 93% in H1 FY25 to 77% in H1 FY26, showing a more even spread of investments across projects. Aashiesh Agarwaal, senior vice president at ANAROCK Capital, said the trend points to a more balanced market. “FY25 had a particularly large transaction involving Reliance Group and ADIA-KKR. This year, we’re seeing less concentration and more mid-sized transactions,” he said.

Regional data shows Mumbai Metropolitan Region (MMR) taking the lead, with its share of total investments rising from 12% to 33% in H1 2026, driven by a major Kanakia-Hines-Mitsubishi-Sumitomo deal. Kolkata also saw renewed activity, accounting for 17% of total investments, largely due to the South City Mall sale to Blackstone, where ANAROCK was the transaction advisor.

Changing focus across asset classes

The report highlights a shift in investor focus, with retail, mixed-use, commercial offices, hotels, and data centres seeing higher activity. The industrial and logistics sector, which had been a major draw in previous years, saw no institutional transactions in H1 FY26. Commercial offices accounted for the largest share of investments at 40%, followed by mixed-use (19%) and retail (17%).

Equity remained the preferred funding route, making up 78% of all transactions, while debt accounted for 22%. The share of foreign capital also rebounded to 73%, after dipping to 65% in FY25.

Despite the slowdown, ANAROCK expects activity to stabilize as developers and investors focus on quality assets and operational stability. “Unless another large transaction takes place this year, FY26 may see a more evenly distributed deal table,” the report noted. With a strong interest in retail, offices, and emerging segments like data centres, analysts expect PE inflows to stay moderate but consistent in the coming quarters.