Private Equity investment in Indian real estate drops 3% amid global uncertainty
Private equity investments in Indian real estate dips by 3% to $3.7 billion in FY2024-2025 from $3.8 billion in the preceding year, Anarock data showed
Private equity investments in Indian real estate declined by 3% to $3.7 billion in FY2024-2025 from $3.8 billion in the preceding year due to low fund inflow in office buildings primarily driven by reduced foreign investor activity amid heightened global macroeconomic uncertainty and geopolitical volatility, according to Anarock.
Offices saw a steep decline in investment—$806 million in FY25 versus $2.2 billion in FY24. While leasing activity remains robust, investor caution persists due to high interest rates and geopolitical stress, the consultant said.
As per the data, the share of foreign investors in total PE investments during the last fiscal year stood at 84% while domestic 16%.
PE investments drop 43% in the last five years
Real estate consultant Anarock's arm Anarock Capital released its data of private equity (PE) deals in Indian real estate. The data showed that during the 2020-21 fiscal year, the PE inflow was $6.4 billion, but the investments fell in 2021-22 to $4.3 billion. It marginally improved in the 2022-23 fiscal year to $4.4 billion before decreasing in 2023-24.
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This represents a 43% drop from FY21 levels, primarily driven by reduced foreign investor activity amid heightened global macroeconomic uncertainty and geopolitical volatility, it noted.
Over the last four fiscal years, private equity investment volumes in India are down 43% to $3.7 billion in FY25 from $6.7 billion in FY21 due to reduced foreign activity amid heightened global macroeconomic uncertainty and geopolitical volatility, Anarock said.
Shobhit Agarwal, MD and CEO – ANAROCK Capital, said, “PE investment volumes have steadily declined over the past five years, dropping from $6.4 billion in FY21 to approximately $ 3.7 billion in both FY25. This represents a 43% decrease from FY21 levels, primarily driven by reduced foreign investor activity amid heightened global macroeconomic uncertainty and geopolitical volatility.”
Number of deals decrease
The number of deals also decreased from 51 in FY24 to 39 in FY25. There were fewer but larger deals dominating the investment space, it showed.
Residential sector enters consolidation phase
It noted that the residential sector has entered a consolidation phase, with average deal size dropping to $117 million (Q2–Q4 FY25) from $233 million (Q1 FY23–Q4 FY25). However, international equity interest is emerging, as seen in Blackstone’s investment in Kolte Patil and Alpha Wave’s deal with Oberoi Realty, the consultant said.
Offices saw a steep decline in investment—$806 million in FY25 vs. $2.2 billion in FY24. While leasing activity remains robust, investor caution persists due to high interest rates and geopolitical stress. The outlook is optimistic with potential rate cuts on the horizon, the data showed.
Retail continues to thrive on strong consumer demand. While mall operators like DLF, Nexus, and Phoenix are expanding aggressively, PE activity remains limited due to dominance by well-funded players and REITs, it noted.
Warehousing demand is buoyed by manufacturing, e-commerce, and 3PL growth. A clear shift toward Grade A assets and ESG-compliant formats is being observed, reinforcing long-term institutional interest, the consultant said.
