NEW DELHI: Deal value in India’s real estate sector declined approximately 76% year-on-year to $705 million in Q3 2026, while the number of transactions fell about 44% to 24 from 43 deals in Q3 2025, according to a report by Grant Thornton Bharat.
The decline was driven by the absence of large-ticket transactions and a shift towards smaller and mid-market deals, with investors increasingly focusing on assets offering income visibility, execution certainty and relatively stable cash flows.
Excluding IPOs and QIPs, the sector recorded 22 M&A and private equity transactions worth $647 million during the quarter. Overall Q3 transaction volume was the lowest quarterly level since Q2 2025.
PE investment falls to $555 million
Private equity (PE) investments stood at $555 million across nine deals in Q3 2026, compared with $859 million in Q3 2025, translating into a decline of about 35% year-on-year by value.
During January-September 2026, PE investors deployed $2.2 billion across 35 transactions, compared with $2.5 billion across 36 deals during the corresponding period of 2025. Average PE deal size consequently declined to $62 million from $69 million.
Large transactions also reduced during the quarter. Only two deals exceeded $100 million, both in the PE segment, with a combined value of approximately $347 million.
Four PE transactions valued above $50 million accounted for 91% of total PE investment value, aggregating $506 million. In Q3 2025, five such transactions had aggregated approximately $777 million.
The largest PE transaction in Q3 2026 was Brookfield India Real Estate Trust and Prime Offices Fund’s $179 million investment in a Grade-A office asset in Mumbai’s Bandra-Kurla Complex.
This was followed by Nexus Select Trust’s $168 million investment in Galaxy Infra Creations, comprising a 5.16 lakh sq ft shopping mall and a 164-key Hyatt Regency hotel in Guwahati.
Kotak Realty Fund’s $84 million investment in Smartworld Developers and an angel investor’s $75 million acquisition of an entire residential tower at Terraza in Juhu, Mumbai, were among the other large transactions.
Commercial assets account for 57% of deal value
Commercial development was the largest value contributor, attracting five investments worth approximately $371 million, accounting for 57% of M&A and PE deal value during the quarter.
Residential development recorded four PE investments worth $183 million, with the report identifying it as the only real estate sub-sector to record an improvement while other segments witnessed moderation in both deal volumes and values.
The top three PE transactions were all in the commercial development segment and together accounted for 66% of overall PE investment value.
M&A remains entirely domestic
M&A activity comprised 13 transactions worth $92 million during Q3 2026, with all deals being domestic. No inbound or outbound M&A transactions were recorded during the quarter.
Real estate operators accounted for 10 of the 13 M&A transactions, indicating continued consolidation and asset-level deal activity within the segment.
The largest M&A transaction was Aurum PropTech’s acquisition of a 100% stake in Locon Solutions, for approximately $48 million. The transaction accounted for more than half of the quarter’s M&A value.
Cross-border activity remained limited, with only two inbound or outbound transactions recorded during 2026 so far. Since 2024, the sector has recorded 15 cross-border deals aggregating $192 million, according to the report.
Public-market fundraising remains limited
Public-market fundraising was also muted, with two IPOs raising an aggregate $59 million during the quarter and no QIP transactions. The two IPOs were from the residential development segment.
Bhavik Vora, partner-real estate, Grant Thornton Bharat, said investors were becoming increasingly selective, with capital being directed towards assets that offer visibility of cash flows, execution certainty and resilience.
