PE investments in Indian real estate rose 59% to $6.7 bn in 2025, led by office assets and foreign capital, with steady inflows of $6.5–7.5 bn expected in 2026
Private equity (PE) investments in Indian real estate have surged to $6.7 billion in 2025, a 59% year-over-year increase, driven largely by overseas institutional capital, which accounted for 76% of total inflows. The office segment led investments with $2.4 billion, supported by steady leasing and long-term demand, while data centres and residential assets followed, a report by Savills India said. Savills India expects investment momentum to continue in 2026, with inflows projected to be between $6.5 billion and $7.5 billion, led by office assets in core markets.
“Private equity investments into Indian real estate have returned to pre-pandemic levels. This recovery is a gradual strengthening of market fundamentals following the post-pandemic adjustment period. Over the past few years, improved regulatory transparency under RERA, balance sheet consolidation among developers, and a clearer focus on asset-level performance have enhanced investor confidence,” the report said.
Office segment leads sectoral split
Sector-wise, the report said that office assets accounted for the largest share of private equity investments in 2025, cornering 35.3% of total inflows. Data centres emerged as the second-largest investment destination with a 23.2% share, followed closely by residential assets at 21%. Industrial and logistics assets accounted for 9% of investments, while retail and hospitality attracted 6% and 5%, respectively. Co-living and student housing remained nascent, together accounting for just 0.5% of total inflows.
Savills noted that while office investments were supported by stable leasing and long-term demand visibility, data centre investments were entirely foreign-led, reflecting global interest in India’s digital infrastructure story. The residential segment, meanwhile, saw balanced participation from both domestic and overseas investors, driven largely by sustained end-user demand in premium and luxury housing.
“Private equity investments in Indian real estate have regained momentum, supported by stable economic growth and improving asset-level fundamentals,” Sumeet Bhatia, Managing Director, Capital Market Services, Savills India, said. He pointed out that capital deployment is increasingly concentrated in income-generating assets such as office buildings, industrial and logistics parks, and data centres.
Land and alternative assets draw selective interest
Land continued to remain a key asset class, accounting for nearly one-fourth of total equity inflows during the year. More than 60% of land-related investments were aligned towards office and data centre developments, indicating investor preference for future-ready, income-generating platforms, the report said.
Other segments, such as industrial and logistics, retail, hospitality, co-living and student housing, also saw selective investor participation, as institutions increasingly diversify portfolios while remaining cautious on execution and exit visibility, Savills said.
Outlook for 2026 remains positive
Looking ahead, Savills India expects private equity inflows into real estate to remain steady in 2026, in the range of $6.5–7.5 billion. Office assets in core markets are likely to continue attracting institutional capital, while industrial and logistics parks are expected to benefit from supply chain diversification, manufacturing-led demand and the growing shift towards organized warehousing.
“Data centres are expected to witness sustained investor interest, supported by rising digital adoption, cloud expansion, and long-term capacity requirements. Residential real estate is also expected to see steady private equity participation, led by luxury and premium housing. Alternative asset classes such as student housing, co-living, senior living, and life sciences are expected to gradually gain traction, though from a relatively small base,” the report said.
“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.
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