India's Real Estate Sector Sees Sharp Drop in Deal Values in Q1 2026
India’s real estate sector recorded 32 transactions during the January–March quarter of 2026, but overall deal value declined sharply by 63% quarter-on-quarter to USD 763 million, according to a report released by Grant Thornton Bharat. The consultancy’s ‘Real Estate Dealtracker’ highlighted that while deal volumes remained robust—making the quarter the second-highest on record after Q3 2025—the aggregate transaction value dropped to its lowest level since the final quarter of 2023.
The decline reflects a shift in investor preference towards smaller and mid-sized transactions rather than large capital deployments. A breakdown of deal activity shows that private equity investments fell significantly during the quarter. Total private equity inflows stood at USD 458 million, marking a 71% decline from USD 1,590 million in the preceding quarter. Similarly, merger and acquisition (M&A) activity declined by 38%, with deal value falling to USD 305 million from USD 493 million.
The report also noted a lack of activity in capital markets, with no initial public offerings (IPOs) or qualified institutional placements (QIPs) recorded during the quarter. This reflects a cautious stance among market participants amid prevailing macroeconomic and geopolitical uncertainties.
According to Shabala Shinde, Partner and Real Estate Industry Leader at Grant Thornton Bharat, the first quarter of 2026 represented a stable yet measured start for the sector. She indicated that while transaction volumes improved, overall deal values corrected sharply due to the absence of large transactions. She further noted that the quarter saw a clear shift towards mid-sized and income-generating assets, with domestic investors continuing to dominate deal activity and private equity remaining a key source of capital.
Investment trends during the period pointed towards a continued preference for commercial real estate, particularly office and retail platforms. These asset classes attracted investor interest owing to their income-generating potential and relatively stable performance metrics.
The report added that, despite the decline in deal values, the broader deal environment remained resilient. However, investors were increasingly adopting a selective approach, focusing on asset-level performance, operational execution, and risk-adjusted returns. This cautious investment strategy reflects the impact of ongoing global uncertainties on capital allocation decisions within India’s real estate market.
