Real estate investments rise 48% in September quarter even as PE inflows soften

Real estate investments rise 48 percent in September quarter even as PE inflows soften

India’s real estate sector is showing a mixed investment pattern, as equity inflows clocked strong growth in the September quarter amid subdued private equity activity.

Equity investments rose around 48 percent year-on-year to $3.8 billion during the July–September period, CBRE South Asia’s Market Monitor Q3 2025–Investments report said.  The report was released on October 10.

“India’s real estate sector is entering a phase of accelerated growth, driven by continued investor confidence,” CBRE chairman and CEO (India, South-East Asia, Middle East and Africa) Anshuman Magazine said.

Overall investment stood at $10.2 billion, a 14 percent increase over the same period in 2024.

Inflows were primarily driven by capital deployment into land and development sites, as well as built-up office and retail assets, the report said.

These categories together accounted for more than 90 percent of total inflows during the quarter.

“In the upcoming quarters, greenfield developments are likely to continue witnessing a robust momentum, with a healthy spread across residential, office, mixed-use, data centres, and I&L sectors,” Magazine said.

In addition to global institutional investors, Indian sponsors accounted for a significant part of the total inflows, Gaurav Kumar, managing director, capital markets and land, CBRE India, said.

“India’s ability to combine strong domestic capital with global institutional participation will remain a key differentiator in 2026 and beyond,” he said.

Among cities, Mumbai attracted the highest investment share at around 32 percent, followed by Pune at 18 percent and Bengaluru at 16 percent. Developers accounted for nearly 45 percent of total inflows, while institutional investors contributed about 33 percent.

Subdued PE investment

In contrast, Anarock Capital’s FLUX H1 FY26 report shows that private equity investments declined 15% in the first half of FY26 from the year-ago period.

The total value of PE investments stood at $2.2 billion for H1, down from $2.6 billion in the previous year.

“While it is tempting to look at the H1 FY26 tally of $ 2.2 billion with positivity, it bears keeping in mind that overall activity for H1 FY26 is down 15 percent on a YoY basis, compared to H1 FY25,” Anarock Capital CEO Shobhit Agarwal said.

“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.”

Despite the decline in total deal value, average deal sizes held steady between $60 million and $100 million, suggesting fewer but similarly sized transactions are taking place.

The share of the top 10 PE deals in total deal value fell from 93 percent in H1 FY25 to 77 percent in H1 FY26.

The report also highlights significant geographic shifts.

The Mumbai Metropolitan Region’s (MMR) share of PE activity surged from 12 percent to 33 percent, while Kolkata’s rose from zero to 17 percent, largely due to major deals such as the sale of South City Mall to Blackstone. Multi-city transactions, on the other hand, declined from 51 percent to 7 percent.

Retail, mixed-use and commercial office spaces accounted for a larger portion of transactions in H1. The industrial and logistics sector drew a blank.

Retail and data centres also saw renewed investor interest. The residential sector continued to consolidate, with new launches and sales moderating but equity appetite returning.

“Equity deals comprised 78 percent of all deals in H1 FY26,” Anarock said, which is consistent with the trend except for FY25 that saw an outsized hybrid transaction.

The share of foreign capital in total investments rebounded to 73 percent after falling to 65 percent in FY25.

Both CBRE and Anarock agree that institutional interest in India’s real estate sector remains strong, led by core assets such as office, retail and data centres and supported by both domestic and foreign investors who continue to view the market as a long-term growth opportunity.