Key Takeaways
- • Private equity investment in India's real estate sector fell 31% year-on-year to USD 1.66 billion in January-September 2026, according to a Knight Frank India report, even as deal count rose to 31 from 24.
- • Domestic investors supplied 85% of inflows (USD 1.42 billion), up from 25% a year earlier, while foreign capital fell to USD 240 million, or 15% of the total from 75%.
- • Average deal size dropped 47% to USD 53 million as large-value transactions declined; total institutional investment was the lowest in six years.
- • Office assets drew USD 1.18 billion (71% of the total), while residential attracted USD 320 million, with 97% of that in debt and structured credit.
- • NCR led city-level inflows at USD 568 million, followed by Pune at USD 356 million and Chennai at USD 319 million.
Summary
Private equity investment in India's real estate sector declined 31% year-on-year to USD 1.66 billion during January-September 2026, according to a report by Knight Frank India, as reported by ANI. The decline came even as the number of transactions rose to 31 from 24 in the same period last year. The average deal size fell 47% to USD 53 million, reflecting fewer large-value transactions. Total institutional investment over the period was the lowest in six years.
The composition of capital shifted sharply. Domestic investors accounted for 85% of total investment, or USD 1.42 billion, compared with 25% (USD 603 million) a year earlier. Foreign investment fell to USD 240 million, representing 15% of the total against a 75% share in the prior-year period. Shishir Baijal, International Partner, Chairman and Managing Director at Knight Frank India, said investors were becoming more selective, with decisions driven by expected returns relative to risk. He added that India's ability to attract foreign capital would depend on quality opportunities, transparency and confidence in long-term economic fundamentals.
By sector, offices attracted the largest share at USD 1.18 billion, or 71% of the total, although inflows fell 19% year-on-year. Completed office projects accounted for 78% of office investment, and equity made up 88% of it. Residential investment reached USD 320 million across 19 deals, a 33% decline; debt and structured credit made up 97% of residential funds, with 83% directed to under-construction projects. The National Capital Region received 63% of residential investment. Warehousing recorded USD 160 million through a single deal in the July-September quarter, and retail recorded no transactions during the nine months.
Among cities, NCR led with USD 568 million, followed by Pune at USD 356 million and Chennai at USD 319 million.
The composition of capital shifted sharply. Domestic investors accounted for 85% of total investment, or USD 1.42 billion, compared with 25% (USD 603 million) a year earlier. Foreign investment fell to USD 240 million, representing 15% of the total against a 75% share in the prior-year period. Shishir Baijal, International Partner, Chairman and Managing Director at Knight Frank India, said investors were becoming more selective, with decisions driven by expected returns relative to risk. He added that India's ability to attract foreign capital would depend on quality opportunities, transparency and confidence in long-term economic fundamentals.
By sector, offices attracted the largest share at USD 1.18 billion, or 71% of the total, although inflows fell 19% year-on-year. Completed office projects accounted for 78% of office investment, and equity made up 88% of it. Residential investment reached USD 320 million across 19 deals, a 33% decline; debt and structured credit made up 97% of residential funds, with 83% directed to under-construction projects. The National Capital Region received 63% of residential investment. Warehousing recorded USD 160 million through a single deal in the July-September quarter, and retail recorded no transactions during the nine months.
Among cities, NCR led with USD 568 million, followed by Pune at USD 356 million and Chennai at USD 319 million.
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