India's real estate capital markets demonstrated a remarkable recovery in FY26, as private equity (PE) deal value soared to USD 4.3 billion, marking the highest transaction volumes seen in seven years. A report by Anarock Capital highlights that the sector experienced a total of 60 deals during this financial year, reflecting a significant turnaround from the subdued activity observed in the preceding two years. The total deal value rose by 13% compared to FY24 and 16% compared to FY25, underscoring a resurgence in investor confidence and a broader participation across different asset classes and geographical regions.
Experts in the industry have noted a pivotal shift in the dynamics of deal-making, as capital deployment has become more diversified. Shobhit Agarwal, CEO of Anarock Capital, emphasized that India’s real estate capital markets have transitioned from a period characterized by concentration and caution to one defined by breadth and conviction. Unlike in FY24 and FY25, where a handful of mega transactions accounted for over a third of the total deal value, FY26 saw the largest deal contributing only 9%. This shift indicates a more balanced and robust market structure, with a growing number of smaller deals attracting a wider range of investors.
The average deal size in FY26 decreased to USD 71 million, the lowest in seven years, suggesting a notable increase in activity across various investor profiles and ticket sizes. Equity continued to dominate as the preferred investment route, comprising 77% of total deal value, while debt accounted for the remaining 23%. Notably, no hybrid deals were recorded during the year, pointing to a clear preference for more traditional investment structures. The commercial office sector emerged as a leading segment, drawing USD 1.6 billion across 14 deals, primarily due to robust leasing demand from Global Capability Centres (GCCs). This segment also saw increased participation from domestic investors, indicating growing local confidence in income-generating assets.
Retail real estate made a significant resurgence, contributing 9% of the total deal value after experiencing minimal activity in the past two years. A notable transaction was Blackstone's acquisition of Kolkata's South City Mall, which highlighted renewed institutional interest in consumption-driven assets. The residential sector maintained stability with 26 institutional deals and consistent average ticket sizes, aided by improved access to bank financing that has reduced developers' reliance on private equity. Conversely, industrial and logistics assets experienced a decline in activity, accounting for 10% of deal value, down from a more dominant share in FY25, although the long-term demand drivers for these sectors remain intact. A key takeaway from FY26 is the substantial rise in domestic capital, with local investments surging to USD 1.64 billion, the highest level in at least seven years, marking a significant milestone in the evolution of India’s real estate investment landscape.