Private equity (PE) investments in India’s real estate sector saw a significant moderation in 2025, dropping 29% year-on-year to approximately $3.5 billion, according to the latest report from Knight Frank India titled ‘Trends in Private Equity Investments in India: H2 2025’.
Despite the overall decline, investor confidence remained anchored in the office segment, which attracted over $2 billion in inflows, accounting for 58% of total PE investments. This stability in office assets highlights their appeal due to scale, institutional depth, and reliable income streams.
Key Highlights from the Report:
- Total PE Investments: ~$3.5 billion in 2025 (down 29% YoY from 2024 levels of ~$4.9 billion).
- Office Sector Dominance: $2.001 billion invested, representing 58% share – volumes in line with the three-year average.
- Residential Sector: Second place with 17% share, driven by a shift towards downside-protected structures like credit-led instruments and de-risked projects.
- Warehousing: Third with 15% share, supported by e-commerce growth and supply-chain formalisation, though moderated by limited supply of stabilised assets.
- Retail: Limited activity at 11%, marked by selective large transactions focusing on high-performing assets.
The slowdown reflects a cautious global environment, with investors recalibrating around higher cost of capital, exit visibility, and valuation alignments. While India’s macroeconomic indicators improved, these factors constrained large-scale deployments, pushing capital towards income-focused and protected strategies.
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, commented: “Knight Frank’s investment forecasting model points to a more supportive environment over the medium term. Private equity investments in Indian real estate are projected to rise by 28% year-on-year to approximately USD 4.4 billion in 2026. This recovery is expected to be measured, driven by selective growth rather than a broad-based return of risk capital.”
Office and logistics strategies are likely to lead the rebound, while residential and retail will continue emphasising structured opportunities. Stabilising interest rates and improving underwriting confidence are anticipated to accelerate deployments from 2026 onwards.
The report tracks core PE activity across office, residential, retail, and warehousing, excluding REITs, InvITs, hospitality, and data centres for comparable insights. Data is sourced from Knight Frank Research and Venture Intelligence, with investments considered up to December 20, 2025.
This moderation comes even as operational performance in office and retail segments remained strong, underscoring India’s real estate resilience amid global reassessments.
Also Read: Private Equity by US firms in India to decline in 2020
