Private Equity in Indian Real Estate Declines 15% in H1 FY26, Deal Sizes Remain Steady
Private equity investments in the Indian real estate sector declined by 15% year-on-year in the first half of FY26, as per ANAROCK Capital. Despite the overall contraction, deal sizes remained stable, indicating a resilient market.
Private EquityReal EstateIndian MarketInvestment TrendsDeal SizesReal Estate NewsOct 11, 2025
Shobhit Agarwal, CEO of ANAROCK Capital, noted, “While Q1 FY26 showed some promise with stronger deals, momentum slowed in Q2. PE activity has been on a consistent decline from a peak of USD 6.4 billion in FY21 to USD 3.7 billion in FY25.” He added that the H1 FY26 tally of USD 2.2 billion, though seemingly positive, underscores the overall contraction in the market.
Despite the dip in overall activity, average deal sizes remained stable, hovering between USD 60 million and USD 100 million. The primary drag on aggregate deal value was the reduced number of transactions rather than the size of individual deals.
Interestingly, the share of the top 10 deals in H1 FY26 declined to 77% from 93% in H1 FY25, suggesting a more even distribution of transactions compared to previous years when outsized deals—like those involving Reliance Group & ADIA-KKR—dominated.
Geographically, Mumbai’s MMR region and Kolkata led the rise in PE activity, while pan-India and multi-city transactions slowed. Key transactions included the Kanakia-Hines-Mitsubishi-Sumitomo deal in MMR and the sale of South City Mall in Kolkata to Blackstone, where ANAROCK acted as transaction advisor.
From an asset class perspective, H1 FY26 saw a shift in investor focus. Retail, mixed-use, and commercial office assets gained prominence, while industrial and logistics deals were largely absent. Hotels and data centers also attracted attention, highlighting evolving investment preferences. Equity transactions dominated 78% of all deals, with foreign capital contributing 73% of total investments, reflecting renewed global investor interest.
The residential and commercial sectors continued to attract investor interest, driven by strong domestic demand, leasing momentum, and the formalization of India’s real estate market. Retail real estate remained robust, with marquee transactions by Nexus Select and Blackstone. Meanwhile, India REITs experienced a strong period, with new listings and acquisitions, supported by SEBI’s reclassification of REITs as equities, further boosting institutional participation.
As H1 FY26 closes, ANAROCK Capital highlights that while the sector faces a moderation in PE inflows, stable deal sizes, a broader distribution of transactions, and sustained interest across residential, commercial, and retail segments indicate resilient underlying demand.
Frequently Asked Questions
What is the overall trend in private equity investments in Indian real estate in H1 FY26?
Private equity investments in the Indian real estate sector declined by 15% year-on-year in H1 FY26, as reported by ANAROCK Capital. However, deal sizes remained stable.
How have deal sizes in the Indian real estate sector been affected?
Despite the overall decline in private equity investments, average deal sizes in the Indian real estate sector have remained stable, ranging between USD 60 million and USD 100 million.
Which regions in India saw an increase in PE activity in H1 FY26?
Mumbai’s MMR region and Kolkata led the rise in PE activity in H1 FY26, while pan-India and multi-city transactions slowed down.
What asset classes have gained prominence in H1 FY26?
In H1 FY26, retail, mixed-use, and commercial office assets gained prominence, while industrial and logistics deals were largely absent. Hotels and data centers also attracted attention.
What role did foreign capital play in H1 FY26 real estate investments?
Foreign capital contributed 73% of total investments in H1 FY26, reflecting renewed global investor interest in the Indian real estate market.
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