NEW DELHI: Private equity (PE) investment in Indian real estate declined 31% year-on-year to $1.66 billion during January-September 2026, even as the number of transactions increased to 31 from 24, according to a report by Knight Frank India.
The average disclosed deal size fell 47% to $53 million, reflecting the absence of large-ticket transactions. On a comparable nine-month basis, PE investment during 2026 was at its lowest level in six years, the report said.
Domestic investors contributed $1.42 billion, accounting for 85% of total PE investment, compared with 25% in the corresponding period of 2025. Domestic investment increased from $603 million in 9M 2025.
Foreign investors contributed about $240 million during the period.
Office attracts $1.18 billion
Office assets remained the largest investment segment, attracting $1.18 billion, or 71% of total PE investment, although investment in the segment declined 19% year-on-year.
Ready office assets accounted for 78% of office investment, compared with 49% in 9M 2025, while 88% of office capital was deployed through equity. Domestic investors accounted for 81% of total office investment during the period.
Residential investment falls 33%
Private equity investment in residential real estate declined 33% year-on-year to $320 million. Debt and structured credit accounted for 97% of residential investment, while 83% of the capital was deployed in under-construction projects.
Domestic investors contributed 94% of residential PE investment. NCR accounted for 63% of residential investment, while Q3 alone attracted approximately $190 million, equivalent to around 60% of the segment’s nine-month investment.
Warehousing attracts $160 million; no retail deals
Warehousing attracted $160 million of PE investment, entirely during Q3, through a single transaction involving a ready asset. The retail sector recorded no PE transactions during January-September 2026, compared with investment of about $374 million in the corresponding period last year.
Shishir Baijal, international partner, chairman and managing director of the company said the changing composition of investment was being driven by a larger role for domestic capital and greater investor focus on the size, structure and risk of individual transactions.
