India's real estate capital markets have demonstrated a remarkable recovery during the fiscal year 2025-2026, achieving levels not seen since the fiscal year 2021-2022. According to Anarock Capital's FLUX FY26 Annual Edition, the sector witnessed a total deal value of $4.3 billion, reflecting a 13% increase compared to FY23-24 and a notable 16% rise over FY24-25. This resurgence is attributed to a more diverse and balanced deal environment, encouraging participation from various asset classes and investors. Shobhit Agarwal, CEO of Anarock Capital, noted that the market is evolving from a phase marked by concentration and caution to one characterized by breadth and conviction. "The deepening of the market is evident with the increase in deal volume, participants, and asset classes," he remarked, despite the ongoing challenges posed by the global economic landscape.
In FY26, the number of transactions surged to 60, reaching a seven-year high, up from 41 in FY25. This uptick signifies a structural improvement in market dynamics, as the largest deal constituted only 9% of the total deal value, a stark contrast to 37% in FY24 and 41% in FY25. The average deal size also saw a decline to $71 million, indicating a broader range of ticket sizes being pursued by investors rather than a decrease in appetite for investment. Equity investments once again dominated the landscape, accounting for 77% of the total deal value, a return to established trends after an anomaly in FY25 due to a significant hybrid transaction. In contrast, debt financing made up 23% of the total, with no hybrid deals recorded for the year.
The commercial office sector proved to be the standout performer during FY26, attracting $1.6 billion through 14 deals, with an average deal size of approximately $116 million, reflecting an increase from the previous fiscal year. This robust demand can be largely attributed to the growing interest from Global Capability Centres (GCCs), which have bolstered investor confidence in the office segment. Notably, domestic investors have begun to play a more significant role in this sector, which has traditionally been dominated by foreign capital.
In contrast, the retail real estate segment has made a strong comeback, accounting for 9% of the total deal value after a period of minimal activity. A landmark transaction was Blackstone's $377 million acquisition of South City Mall in Kolkata, which underscored renewed institutional interest in consumption-driven assets. Meanwhile, the residential segment remained stable with 26 institutional deals averaging around $25 million. Although bank lending growth continues to support developers with cost-effective financing, institutional capital remains focused on established players. The industrial and logistics segment, however, experienced a decline in its share of total deals, dropping to 10% from 47% in FY25. Despite this reduction, interest in the sector remains, driven by e-commerce demand and the ongoing transformation of warehouses into technologically advanced fulfilment hubs.