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NEW DELHI: The real estate market in India experienced a notable decline in activity during Q2 2025, with total deal value decreasing by 35% quarter-on-quarter to USD 775 million, despite continued institutional interest in commercial properties and structured investments, as highlighted in a report by Grant Thornton Bharat.
During this quarter, 17 deals were recorded, a drop from 28 in Q1 2025, resulting in a 39% decline in overall transactions. Nonetheless, the quarter was supported by a few significant transactions that accounted for over 90% of the total deal value. The standout deal was Blackstone’s acquisition of South City Mall in Kolkata for USD 378 million, reflecting a strong investor preference for reliable, income-generating assets in the retail and commercial sectors.
Commercial Development Outshines; Residential and Tech Lag
Commercial development dominated Q2, comprising 38% of all deals and 62% of the overall deal value. Alongside Blackstone, the Prime Offices Fund’s USD 87 million investment in Prius Platinum, a Grade A office space in South Delhi, bolstered this segment.
In contrast, the residential and proptech sectors showed diminished activity. Residential assets represented 23% of the volume but only 10% of the value, while proptech dropped to 15% of the volume and 5% of the deal value, down substantially from the previous quarter. Notably, Lighthouse Funds invested USD 35 million in Knest Manufacturers, and Qatar Development Bank backed Alt DRX, a tokenized property platform, indicating early investments in digital innovation.
M&A Maintains Value, Volume Dips
Mergers and acquisitions recorded six deals totaling USD 195 million, showing a 45% decrease in volume from Q1, yet a 42% increase in value. Most activity was driven by domestic consolidation, exemplified by Max Estates’ acquisition of Boulevard Projects in Noida for USD 161 million.
Both inbound and outbound activities remained muted for the second consecutive quarter, signaling a growing focus on domestic deal-making. A notable cross-sector transaction was DPF Textiles’ acquisition of CCCL Infrastructure, marking a shift from manufacturing into real estate.
Private Equity Shows Caution, Capital Markets Recover
Private equity transactions fell to seven from 17 in the previous quarter, but one significant deal—Blackstone’s acquisition of South City Mall—accounted for a large portion of the USD 580 million invested. Overall, private equity volume decreased by 59%, while value declined by 45% quarter-on-quarter.
On a positive note, capital markets showed signs of recovery with two IPOs and two QIPs raising USD 243 million and USD 245 million, respectively. Kalpataru raised USD 268 million through these channels. Additionally, an SM REIT received SEBI approval, indicating increased access to income-generating real estate opportunities.
Outlook: Cautious Optimism for H2 2025
The report highlights a shift in investor sentiment towards larger, fewer investments, favoring resilient commercial assets and scalable platforms. With India’s largest-ever REIT IPO anticipated in H2 and ongoing interest in SM REITs, the market is evolving towards deeper capital market involvement.
“Commercial real estate continues to drive growth even as other sectors recalibrate. This cautious optimism is bolstered by strategic interest in platform-led growth and yield-focused investments,” stated Shabala Shinde, partner and Real Estate Leader at Grant Thornton Bharat LLP.
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