Mumbai, Oct 06: Private equity investment in Indian real estate has staged a strong recovery, with inflows rising 23% year on year to USD 2.7 Bn in H1 FY27, up from USD 2.2 Bn in the same period last year, according to the latest FLUX report by Anarock. This is the strongest first half since H1 FY23 and follows three years of easing, despite continued geopolitical tensions and high global interest rates.
The half-year inflows already account for about 63% of the USD 4.3 Bn invested in the whole of FY26. Deal activity was also broader, with 30 transactions recorded in H1 FY27 against 22 a year earlier, while the average deal size rose 18% to USD 91 Mn.
“The first half of FY27 marks a clear turning point for private equity in Indian real estate. Investors are no longer just testing the waters; they are committing larger cheques, taking equity positions, and backing scalable platforms. The fact that this has happened against an uncertain global backdrop shows that India is now seen as a core, long-term allocation rather than an opportunistic bet,” says Shobhit Agarwal, CEO, ANAROCK Capital.
Domestic capital - the second engine
The standout trend of H1 FY27 is the rise of domestic capital. Domestic investors deployed about USD 1.3 Bn across 24 deals - nearly six times the USD 220 Mn invested in H1 FY26 - and accounted for 48% of total inflows. Just two years ago, in FY25, their share stood at only 16%.
Foreign investors, meanwhile, invested about USD 1.4 Bn across six deals, up 19% year on year. While domestic investors led by number of deals, foreign investors wrote far larger cheques, averaging about USD 238 Mn per deal compared with about USD 54 Mn for domestic investors.
PE Inflows by Investor Source, H1 FY27
|
Investor Source |
No. of Deals |
Amount (USD Bn) |
Share |
Avg. Deal Size (USD Mn) |
YoY Change |
|
Foreign |
6 |
1.43 |
52% |
238 |
+19% |
|
Domestic |
24 |
1.30 |
48% |
54 |
~6x |
|
Total |
30 |
2.72 |
100% |
91 |
+23% |
“The depth of domestic capital is the biggest structural change we are seeing. Real estate AIFs, family offices and domestic institutions now have the scale and conviction to lead large transactions. Importantly, this growth is additive. Foreign capital has not retreated; domestic money has simply added a strong new layer of funding, which makes the market far more resilient to global shocks,” adds Shobhit Agarwal.
Data centres & Hospitality gain ground, Office leads
- Office remained the largest asset class, attracting 35% of inflows, almost unchanged from 36% in FY26, as investors continued to buy completed, leased Grade A assets for stable rental income.
- The sharpest shift came from new-age assets - data centres jumped to 29% of inflows from just 4% in FY26, driven by large-ticket foreign platform investments. Hospitality took 12% after recording no deals in the previous year.
- Residential took 14% of inflows but led by deal count, with nearly 90% of residential capital coming through structured debt for project completion. Industrial & logistics took 6%, while retail saw no PE deals in the half due to a shortage of new Grade A mall supply.
Asset Class-wise Share of PE Inflows
|
Asset Class |
FY26 |
H1 FY27 |
|
Office |
36% |
35% |
|
Data Centres |
4% |
29% |
|
Residential |
17% |
14% |
|
Hospitality |
0% |
12% |
|
Industrial & Logistics |
10% |
6% |
|
Mixed Use |
22% |
4% |
|
Retail |
9% |
0% |
Multi-city platforms take nearly half of all capital
Investors increasingly backed platforms spanning several cities rather than single assets. Pan-India and multi-city deals took 49% of inflows in H1 FY27, up from 18% in FY26.
Among individual cities, Bengaluru led with 17%, up from 13%, while Pune nearly doubled its share to 11%. NCR and MMR, which together took 40% of inflows in FY26, saw their combined share fall to 16%.
City-wise Share of PE Inflows
|
City |
FY26 |
H1 FY27 |
|
Pan India / Multi-City |
18% |
49% |
|
Bengaluru |
13% |
17% |
|
Pune |
6% |
11% |
|
MMR |
17% |
9% |
|
NCR |
23% |
7% |
|
Chennai |
9% |
6% |
|
Hyderabad |
1% |
1% |
|
Kolkata |
9% |
0% |
|
Others |
4% |
0% |
