Private equity in Indian real estate declines by 15% in H1 FY26, deal size remains stable: ANAROCK Capital

Private equity (PE) activity in the Indian real estate sector remained subdued in the first half of FY26, with total investments down 15% year-on-year compared to H1 FY25, according to ANAROCK Capital’s latest edition of FLUX.

Shobhit Agarwal, CEO of ANAROCK Capital, noted: “While the first quarter of FY26 showed some promise with stronger deals, momentum slowed in the second quarter. PE activity has consistently declined from a peak of USD 6.4 billion in FY21 to USD 3.7 billion in FY25.” He added that the total of $2.2 billion in the first half of 2026, while apparently positive, underlines the overall contraction of the market.

Despite the decline in overall activity, the average deal size remained stable and ranged between $60 million and $100 million. The main drag on overall deal value was the reduced number of transactions, rather than the size of individual deals.

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Interestingly, the share of top 10 deals in the first half of FY26 fell to 77% from 93% in the first half of FY26, indicating a more even distribution of transactions compared to previous years when outsized deals – such as those with Reliance Group and ADIA-KKR – dominated.

Geographically, the MMR region of Mumbai and Calcutta led the surge 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, the first half of FY26 saw a shift in investor focus. Retail, mixed-use and commercial office buildings gained prominence, while industrial and logistics deals were largely absent. Hotels and data centers also attracted attention, highlighting changing investment preferences. Equity transactions dominated 78% of all deals, with foreign capital contributing 73% of total investments, reflecting renewed interest from global investors.

The residential and commercial sectors continued to attract investor interest, driven by strong domestic demand, rental momentum and formalization of the Indian real estate market.

Retail real estate remained robust, with large transactions by Nexus Select and Blackstone. Meanwhile, Indian REITs enjoyed a strong period, with new listings and acquisitions supported by SEBI’s reclassification of REITs as equities, further boosting institutional participation.

As H1 FY26 draws to a close, ANAROCK Capital highlights that while the sector is experiencing a moderation in PE inflows, stable deal sizes, a broader spread of transactions and continued interest in the residential, commercial and retail segments indicate resilient underlying demand.

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