PE inflow in Indian real estate drops 15% in Jul-Sep to $819 million: Anarock

The private equity (PE) inflow stood at USD 967 million in the year-ago period.

Private equity investments in Indian real estate dropped 15 per cent in July-September to USD 819 million amid global uncertainties, according to property consultant Anarock.

The private equity (PE) inflow stood at USD 967 million in the year-ago period.

During the April-September period of fiscal 2025-26, the PE investments fell 15 per cent to USD 2.2 billion from USD 2.6 billion in the corresponding period of the preceding financial year, as per the data by Anarock's arm Anarock Capital.

The share of foreign capital in total investments stood at 73 percent during the first half of this fiscal.

"A stronger deal showing in Q1 FY26 appeared to present a glimmer of hope, though it was short-lived as activity subsided again going into the second quarter. When viewed on a full-year basis, PE activity has been on a steady decline from the high of USD 6.4 billion seen in FY21 to USD 3.7 billion in FY25," said Shobhit Agarwal, CEO of Anarock Capital.

He noted that real estate sales volumes are high in the residential segment and therefore, developers' cash flows have improved significantly.

"This reduces their dependence on expensive AIFs. Also, because of improved business dynamics, banks are well capitalized and have become more willing to lend to real estate, unlike in earlier years," Agarwal said.

On the commercial real estate side, he said there is currently a lot of uncertainty because of the Russia-Ukraine war, which is causing inflation to rise, and other global macroeconomic uncertainties.

"This is why global funding flows have taken knock. We consider this a temporary phenomenon as India remains a growth market and one of the few countries where investments can grow. Once these uncertainties lift and better clarity emerges, it is only a matter of time before PE fund flows to commercial real estate pick up," Agarwal said.

During the first six months of this fiscal, industrial & logistics segment did not receive any PE inflow while the retail, mixed-use and commercial asset classes registered a strong presence. Hotels and data centres also made an impact in the current half-year, the consultant said.