NEW DELHI: Private equity investments in India’s real estate sector saw a decline of 23% to USD 1.13 billion during the first half of the year, driven by global uncertainties, as reported by Knight Frank.
In comparison, PE fund inflows were USD 1.47 billion in the same period last year.
According to Knight Frank India, office assets attracted 89% of the PE investments in the first half of this year, while the residential sector garnered the remaining equity inflows.
Shishir Baijal, International Partner and Managing Director at Knight Frank India, stated, “The decline in PE investments during H1 2026 reflects the changing global capital landscape, not a decline in India’s real estate fundamentals.” He noted that rising global borrowing costs have diminished the yield advantage traditionally held by emerging markets.
Baijal elaborated, “As a result, capital allocation is increasingly swayed by factors such as execution certainty, taxation, liquidity, and realized returns.”
Data shows that PE inflows rose by 33% to USD 998 million from USD 579 million in H1 2025.
Investments in the residential sector dropped to USD 128 million during January-June from USD 297 million the previous year, as investors became more cautious and selective about development-led opportunities.
The warehousing and retail sectors did not experience any significant PE transactions in H1 2026. However, the absence of deals does not necessarily indicate a decline in the appeal of these asset classes.
