The sharp recovery signals renewed investor confidence after two muted years, with deal values rising 13% over FY24 and 16% over FY25. More importantly, the growth reflects a broad-based and healthier investment landscape, rather than dependence on a few large-ticket deals.

Broader Market Participation Drives Growth

Unlike previous years, where mega transactions dominated the market, FY26 witnessed a significant structural shift. The largest deal contributed only 9% of total investment activity, compared to 37% in FY24 and 41% in FY25.

Shobhit Agarwal, CEO – ANAROCK Capital, noted that the market has transitioned into a more mature phase.

“India’s real estate capital markets have moved from a period of concentration and caution to one of breadth and conviction. The market is deepening with more deals, more participants, and wider asset class participation,” he said.

The total number of deals rose to 60 transactions, up from 41 in FY25, while the average deal size dropped to USD 71 million, indicating increased participation across a wider range of investors.

Office Segment Leads Investment Activity

The commercial office segment emerged as the top performer, attracting USD 1.6 billion across 14 deals. Strong leasing demand, particularly from Global Capability Centres (GCCs), continued to drive investor confidence.

Notably, domestic investors made deeper inroads into office assets, a segment traditionally dominated by foreign capital.

Retail Real Estate Makes a Comeback

Retail real estate witnessed a revival in FY26, contributing 9% of total deal value, after remaining largely inactive in the previous two years.

A key highlight was Blackstone’s USD 377 million acquisition of South City Mall in Kolkata, which stood as the largest equity deal of the year, signaling renewed institutional interest in consumption-driven assets.

Residential Sector Remains Stable

The residential segment recorded 26 institutional deals, with average deal sizes holding steady at around USD 25 million.

Strong support from the banking sector, including robust credit growth, has provided developers with alternative funding avenues, slightly reducing reliance on private equity. However, institutional investments remained active, particularly among established developers.

Industrial & Logistics Moderates After Peak

After dominating FY25 with 47% share, the industrial and logistics sector moderated to 10% in FY26. Despite the slowdown, long-term investor interest remains intact, supported by e-commerce growth and tech-enabled warehousing demand.

Equity Dominates Investment Structures

Equity investments accounted for 77% of total deal value, reaffirming investor preference for ownership-driven structures. Debt contributed the remaining 23%, while no hybrid deals were recorded during the year.

Domestic Capital Hits Multi-Year High

One of the most notable trends in FY26 was the rise of domestic capital, which reached USD 1.64 billion, the highest in at least seven years.

The share of foreign investments declined significantly from 82% in FY22 to 52% in FY26, while domestic participation increased to 38%, reflecting growing local confidence in real estate as an asset class.

Aashiesh Agarwaal, SVP – Investment Advisory, ANAROCK Capital, highlighted this shift:

“Rising domestic prosperity, improved transparency, and stronger conviction in real estate are driving increased participation from local investors.”

NCR Leads City-Wise Investment

On the geographic front, NCR led with a 23% share of total deal activity, followed by:

• MMR (17%)
• Bengaluru (13%)
• Chennai (9%)

Kolkata also emerged as a key market, driven by the South City Mall deal, contributing 9% of total investments.

Meanwhile, pan-India or multi-city deals dropped sharply from 50% in FY25 to 18% in FY26, indicating a more targeted, city-specific investment approach.

Platform Deals Gain Momentum

Platform investments continued to shape the market, with HDFC Capital playing a dominant role, participating in multiple deals including:

• Eldeco (USD 174 Mn)
• Hero Realty (USD 112 Mn)
• Curated Living Solutions (USD 109 Mn)

Emerging themes such as rental housing and luxury second homes also gained traction, reflecting evolving investor strategies.

Conclusion

FY26 marks a turning point for India’s real estate investment landscape, with higher deal volumes, diversified capital flows, and increased domestic participation. The shift towards a more balanced and resilient market structure indicates sustained momentum, despite global uncertainties.

Also Read: Real Estate Stocks End Modestly Weak as Mid-Caps Lag; Large Developers Provide Support

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