India's real estate market experienced a notable uptick in deal volume during the first quarter of 2026, with 32 transactions recorded, according to Grant Thornton Bharat's Real Estate Dealtracker. This figure represents an increase from the 26 deals completed in the previous quarter and shows a 14% rise compared to the same period last year, when 28 deals were executed. However, the total deal value saw a significant decline to USD 763 million, marking one of the lowest quarterly values since late 2023. The stark reduction from USD 3 billion in the previous quarter underscores the challenges facing the sector amid shifting investment dynamics.
The first quarter of 2026 exhibited a clear pivot towards mid-sized and income-generating assets, with domestic investment remaining a dominant force in the market. Shabala Shinde, Partner and Real Estate Industry Leader at Grant Thornton Bharat, noted that there is a growing preference for commercial assets, specifically in office and retail sectors, driven by their yield visibility and stable cash flows. This trend is further evidenced by the continued activity in Real Estate Investment Trust (REIT)-led transactions, which reinforce institutional confidence in high-quality, income-generating properties. Despite the overall dip in total deal value, M&A activity saw an increase in the number of deals, with 19 transactions recorded, although their value plummeted to USD 305 million, reflecting a lack of large-scale transactions.
Investment patterns indicate a selective capital landscape, where investors are increasingly favoring income-generating commercial assets and opportunities aligned with REITs and infill developments. Chan Chakravarti, a seasoned global real estate investor, emphasized that the current investment environment is maturing, with a focus on yield visibility, asset quality, and execution certainty in the face of ongoing global macroeconomic and geopolitical uncertainties. The most significant transaction during the quarter was RSVM Hospitality Pvt Ltd's acquisition of a 100% stake in an 18.6-acre land parcel from the Neterwala Group in Thane, valued at USD 55 million, which highlights a sustained interest in operator-led real estate opportunities.
Despite facing headwinds from global uncertainty, including geopolitical tensions and cautious cross-border capital flows, India’s real estate sector continues to attract investment due to its robust economic growth, infrastructure development, and improving market transparency. Binitha Dalal, Founder and Managing Partner of Mt. K Kapital, forecasts sustained interest in office assets, redevelopment projects, and strategic land acquisitions in key urban centers. Furthermore, private equity activity in the sector recorded 13 deals worth USD 458 million, marking the highest quarterly volume in a year, although the average deal size fell significantly from USD 80 million to USD 23.8 million, indicating a trend towards smaller, more manageable investments in the current market climate.