Investment volumes in Indian realty down 43% from FY21 peak: Report

By Jag Jivan*

Private equity (PE) investments in Indian real estate continued their downward trajectory in FY25, declining to USD 3.7 billion — a 43% fall from the peak of USD 6.4 billion in FY21, according to the ANAROCK Capital FLUX FY25 report. Despite a lower number of deals, average ticket sizes rose sharply, reflecting a more concentrated and strategic capital deployment approach.

FY25 recorded only 39 deals, down from 51 in FY24, but the average deal size surged to USD 94 million from USD 75 million the previous year. Major transactions during the year included GIC-Xander’s USD 258 million infusion into Shapoorji Pallonji and Keppel Land’s USD 251 million investment in RMZ and CPPIB. A standout was the Reliance–ADIA–KKR hybrid transaction, which alone contributed approximately 42% of the total investment value for the year. This deal also played a key role in pushing hybrid deal structures to 42% of overall PE transactions.

Foreign capital played a dominant role in FY25, accounting for 84% of all PE investments in Indian real estate, a notable increase from 68% in FY24. This underscores a renewed interest from global investors, despite persistent macroeconomic uncertainties and geopolitical tensions.

Logistics and warehousing emerged as the top-performing sector, drawing 48% of the total PE capital — the highest in the past five years. Meanwhile, pan-India and multi-city transactions continued their upward trend, constituting 52% of total deal value, compared to 47% in FY24. This reflects growing investor confidence in diversified portfolios and formalization across the sector.

Commercial office investments saw a significant decline, with total inflows dropping to USD 806 million from USD 2.2 billion a year earlier, as investors remained cautious amid global volatility and high interest rates. The residential segment entered a consolidation phase, though deals such as Blackstone’s investment in Kolte Patil and Alpha Wave’s transaction with Oberoi Realty signal continued international interest. In contrast, retail real estate is thriving on strong consumer demand, but limited PE activity due to dominance by REITs and large, well-capitalized players.

According to Shobhit Agarwal, MD & CEO of ANAROCK Capital, “Private equity inflows have shrunk, but what we are witnessing is a reallocation towards fewer but higher-quality bets.” He added that the rise in hybrid structures and the growing share of foreign participation indicate evolving risk appetites and strategic repositioning by investors.

As the sector heads into FY26, capital is expected to consolidate further around high-quality assets. With global investors re-engaging, Indian real estate may be entering a new phase of strategic and resilient growth.

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*Freelance writer. Download the full report: ANAROCK Capital FLUX FY25

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