M
umbai: Private‑equity inflows into Indian real‑estate fell to a four‑year low in H1 FY26, dropping 15 % year‑on‑year to $2.2 billion. The decline is driven by fewer transactions and smaller average deal sizes, even though a handful of marquee deals kept the market visible in major metros.
ANAROCK Investment Banking’s “FLUX: Market Monitor for Capital Flows in Indian RE, H1 FY26” shows PE capital, which peaked at $6.4 billion in FY21, has slid to $3.7 billion in FY25. In H1 FY26, 22 deals were executed versus 25 a year earlier, and the average transaction fell 31 % to $77 million. The top ten deals now account for 77 % of activity, down from 93 % a year earlier, indicating a more balanced spread of capital.
Blackstone’s $377 million purchase of South City Mall in Kolkata and a $348 million joint deal by Hines, Sumitomo and Mitsubishi for Kanakia in Mumbai were the largest transactions. Commercial and residential assets attracted the bulk of funding; industrial and logistics projects saw no institutional deals. Sector shares were: commercial offices 40 %, retail 17 %, mixed‑use 19 %, residential 15 %, data centres 5 %, hotels 4 %.
Geographically, the Mumbai Metropolitan Region (MMR) and Kolkata captured half of all inflows. MMR’s share rose from 12 % to 33 %, driven by the Kanakia‑Hines transaction, while Kolkata surged from zero to 17 % after the South City Mall sale. Chennai grew to 13 %, and pan‑India or multi‑city deals fell to 7 % from 51 % in FY25.
Equity financing dominated, comprising 78 % of total inflows versus 36 % in FY25 when hybrid structures prevailed; debt made up 22 %. Foreign investors supplied 73 % of capital, reversing last year’s dip, while domestic funds dropped to 7 %. Hybrid deals rose to 20 %.
Residential real‑estate continued to consolidate, with fewer new launches but steady equity interest. Retail assets benefited from robust financials, driving two large deals involving Nexus Select and Blackstone. Commercial office demand remained strong, led by global capability centres and co‑working operators, with $869 million of office space transacted—twice the prior average.
Institutional players stayed cautious on industrial and logistics deals but showed appetite for high‑quality assets linked to consumption, third‑party logistics and e‑commerce. REITs regained confidence after SEBI reclassified them as equities, and unit prices rallied 15–27 %. The newly listed Knowledge Realty Trust was oversubscribed 12.5 times, while Mindspace, Nexus and Embassy REITs were active in acquisitions and divestments.
ANAROCK predicts that India’s rapid growth and the formalisation of its real‑estate market will sustain investor interest, even as capital deployment patterns shift across cities and asset classes.
