PE Investments in Indian Real Estate Decline 15% to USD 819 Million in Q3: Anarock
Private equity investments in Indian real estate decreased by 15% to USD 819 million in the July-September quarter, according to Anarock. The drop is attributed to global uncertainties and economic challenges.
Private EquityReal EstateAnarockInvestmentGlobal UncertaintiesReal Estate MumbaiOct 11, 2025
During the first half of the 2025-26 fiscal year, PE investments fell by 15 percent to USD 2.2 billion, down from USD 2.6 billion in the corresponding period of the previous financial year, according to data from Anarock's arm, Anarock Capital. The share of foreign capital in total investments was 73 percent during the first half of this fiscal year.
A stronger deal showing in the first quarter of FY26 initially presented a glimmer of hope, but this was short-lived as activity subsided in the second quarter. When viewed on a full-year basis, PE activity has been on a steady decline from a high of USD 6.4 billion in FY21 to USD 3.7 billion in FY25, said Shobhit Agarwal, CEO of Anarock Capital.
Agarwal noted that real estate sales volumes are currently high in the residential segment, which has significantly improved developers' cash flows. This reduction in dependence on expensive Alternative Investment Funds (AIFs) is a positive development. Additionally, due to improved business dynamics, banks are now better capitalized and more willing to lend to the real estate sector, a contrast to previous years.
On the commercial real estate front, Agarwal highlighted that there is considerable uncertainty due to the Russia-Ukraine conflict, which is causing inflation to rise and other global macroeconomic uncertainties. These factors have impacted global funding flows. However, he believes this is a temporary phenomenon, as India remains a growth market and one of the few countries where investments can still grow. Once these uncertainties are resolved and better clarity emerges, it is expected that PE fund flows to commercial real estate will pick up.
During the first six months of this fiscal year, the industrial and logistics segment did not receive any PE inflow. In contrast, the retail, mixed-use, and commercial asset classes registered a strong presence. The hotel and data center sectors also made a notable impact in the current half-year, according to the consultant.
Frequently Asked Questions
What is the current state of PE investments in Indian real estate?
Private equity investments in Indian real estate have declined by 15% to USD 819 million in the July-September quarter of 2023, according to Anarock.
How has the industrial and logistics segment performed in terms of PE inflow?
The industrial and logistics segment did not receive any PE inflow during the first six months of the fiscal year, as reported by Anarock.
What are the main factors affecting PE investments in commercial real estate?
The main factors affecting PE investments in commercial real estate include global uncertainties such as the Russia-Ukraine conflict, rising inflation, and other macroeconomic challenges.
What is the outlook for PE investments in the Indian real estate market?
Despite the current decline, experts believe that once global uncertainties subside, PE fund flows to commercial real estate in India will pick up, given the country's growth potential.
How have residential real estate sales volumes impacted developers?
Residential real estate sales volumes are high, which has significantly improved developers' cash flows and reduced their dependence on expensive Alternative Investment Funds (AIFs).
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