Private equity investments in Indian real estate soared by 59 percent year-on-year, reaching a substantial $6.7 billion in 2025, according to a recent report from Savills India. This significant increase signals a robust recovery, returning to levels observed prior to the pandemic.
The influx of capital primarily stemmed from overseas institutional investors, who accounted for an impressive 76 percent of all investments. The office segment emerged as the leading category, attracting $2.4 billion, which represents 35.3 percent of the total equity inflows. This growth was bolstered by stable leasing activity and positive long-term demand forecasts.
Following the office market, data centers and residential real estate captured 23.2 percent and 21 percent of investments, respectively. Notably, investments in data centers were solely driven by foreign capital, while the residential sector experienced a balanced involvement from both domestic and international investors.
Land remained a critical asset class, constituting nearly one-fourth of the total equity inflows, with more than 60 percent of land investments directed toward developing office spaces and data centers. “Private equity investments in Indian real estate have regained momentum, supported by stable economic growth and improving asset-level fundamentals,” stated Sumeet Bhatia, Managing Director of Capital Market Services at Savills India.
Bhatia emphasized that the trend of foreign institutional capital is expected to maintain its stronghold in the sector, with projections for 2026 indicating a potential investment range of $6.5 billion to $7.5 billion. Areas likely to attract institutional interest include prime office assets, industrial and logistics parks, and data centers.
Saket Mohta, Managing Director of the Merlin Group, expressed optimism regarding the future, noting that the year 2026 will usher in a new phase of growth for the real estate sector. He highlighted the anticipated expansion of Private Equity and Real Estate Investment Trusts (REITs), which are expected to play an increasingly significant role in the market.
Furthermore, Savills India attributed the heightened investor confidence to improved regulatory transparency under the Real Estate (Regulation and Development) Act (RERA), along with a consolidation of balance sheets among developers and a sharper focus on performance at the asset level.
As the landscape evolves, the institutional role in India”s real estate market is rapidly gaining traction, paving the way for a transition towards a more structured industry status. With ongoing demand across various sectors, including housing and commercial assets, the outlook for private equity investments remains positive.
