Real estate private equity inflows return to pre-pandemic levels, led by land and data centres

Real estate private equity inflows return to pre-pandemic levels, led by land and data centres

Land parcels and data centres emerged as key magnets for institutional capital in 2025, even as the private equity investments in real estate sector in 2025 reached pre-pandemic levels.

According to data from real estate consultancy firm Savills India, private equity investments in the sector surged 59 percent year-on-year to $6.7 billion (Rs 60,323 crore), with land alone accounting for nearly a quarter of total inflows—largely aligned to future office and data centre developments.

Data centre investments, which were entirely foreign-led, cemented their status as a core real estate asset class. The office segment attracted the highest capital at $2.4 billion (35.3 percent), supported by stable leasing and long-term demand visibility.

Savills data on private equity institutional investments included equity deals executed through private route, excluding plain debt deals executed via fund raises, QIPs, public market deals and platform formations.

Market observers said that private equity investments rebounded to pre-pandemic levels in 2025 on the back of stronger balance sheets, improved transparency and better asset-level performance.

Data showed that in 2019, Indian institutional investments in real estate sector were at $6.7 billion while in 2020 it was $6.6 billion. In 2021, private equity inflows came down to $3.4 billion but rose to $4.3 billion in 2024. In 2025, these investments in real estate sector rebounded to pre-pandemic levels of $6.7 billion.

Data centres and the residential sector accounted for 23.2 percent and 21 percent of total investments, respectively. While investments in data centres were entirely driven by foreign capital, the residential segment witnessed equal participation from domestic and foreign investors. Over 60 percent of land-related investments were aligned towards office and data centres developments.

Sumeet Bhatia, Managing Director, Capital Market Services, Savills India, said that private equity investments in Indian real estate have regained momentum, supported by stable economic growth and improving asset-level fundamentals.

“Capital deployment has increasingly focused across office, industrial and logistics, and data centres, reflecting a preference for income-generating assets. The residential segment has also gained traction, driven by sustained end-user demand, particularly in the premium and luxury segments,” he said.

Outlook for 2026

Savills India expects $6.5 billion – $7.5 billion of private equity investments in real estate in 2026. Market observers said that the office segment is expected to continue attracting institutional capital in core markets. Industrial and logistics assets are anticipated to remain a key focus area and data centres are expected to witness sustained investor interest.

They said that residential real estate is also expected to see steady private equity participation, led by luxury and premium housing.

“Looking ahead, private equity activity is expected to remain steady, with foreign institutional capital continuing to anchor investments. The growing adoption of REITs in India is reshaping the real estate investment landscape by improving exit visibility and reinforcing institutional participation across asset classes," Bhatia said.