Mumbai: In a remarkable resurgence, private equity investments in Indian real estate have skyrocketed by 59% year-on-year to reach $6.7 billion in 2025. This significant growth signals a robust recovery, bringing the sector back to pre-pandemic levels, as detailed in a recent report by Savills India. The surge in investments has been primarily fueled by overseas institutional capital, which has accounted for a staggering 76% of total inflows. This trend underscores the increasing confidence of foreign investors in the Indian real estate market.
The office segment emerged as the most attractive investment category, drawing in $2.4 billion, which represents 35.3% of the total inflows. This uptick is largely attributed to stable leasing activity and positive long-term demand outlook. Following the office sector, data centres and residential properties also saw substantial interest, with shares of 23.2% and 21% respectively. Notably, investments in data centres were driven entirely by foreign capital, whereas the residential segment enjoyed a balanced participation from both domestic and international investors, reflecting a healthy diversification in investment sources.
Land assets have also played a crucial role in this investment landscape, constituting nearly 25% of total equity inflows. Over 60% of these land investments have been strategically directed towards the development of office spaces and data centres. According to Sumeet Bhatia, Managing Director of Capital Market Services at Savills India, “Private equity investments in Indian real estate have regained momentum due to stable economic growth and strengthening asset-level fundamentals.” His insights suggest that the inflow of foreign institutional capital is likely to remain a cornerstone of this upward trend in the coming years.
Looking ahead, the year 2026 is anticipated to usher in new momentum in real estate growth, with expectations of significant advancements in Private Equity and Real Estate Investment Trusts (REITs). As stated by Saket Mohta, Managing Director of Merlin Group, “India's real estate sector will experience strengthened growth in 2026, driven by sustained demand across housing, commercial, and alternative asset classes.” This indicates a transformative period where the institutional role in India’s real estate is gaining traction, propelling the sector towards achieving its desired industry status.
In conclusion, the burgeoning growth in private equity investments signifies a robust turnaround for the Indian real estate market. With a firm foundation set by foreign investments and a positive economic outlook, stakeholders can look forward to an exciting future in India's real estate landscape.
