Private equity (PE) investment in Indian real estate rose 23 per cent year-on-year (YoY) to $2.7 billion in the first half of FY27 (April-September 2026), from $2.2 billion in H1 FY26, according to the latest FLUX report by ANAROCK Research and Advisory.
The H1 FY27 inflow marks the strongest first-half performance since H1 FY23, signalling a recovery in institutional investment despite geopolitical uncertainties and elevated global interest rates. The $2.7 billion invested during the first six months of FY27 is already around 63 per cent of the $4.3 billion invested during the entire FY26.
Domestic investors emerge as a key source of capital
One of the biggest shifts in the Indian real estate PE market has been the sharp rise in domestic capital.
Domestic investors deployed around $1.3 billion across 24 deals in H1 FY27, nearly six times the $220 million invested during the same period last year. Their share of total PE inflows rose to 48 per cent, compared with just 16 per cent in FY25.
Foreign investors, meanwhile, invested around $1.4 billion across six deals, marking a 19 per cent YoY increase. While foreign investors participated in fewer transactions, their average deal size was significantly higher at around $238 million, compared with$54 million for domestic investors.
Overall, the number of PE transactions rose 36 per cent YoY to 30 in H1 FY27 from 22 a year earlier. The average deal size also increased 18 per cent to $91 million.
“The first half of FY27 marks a clear turning point for private equity in Indian real estate. Investors are no longer just testing the waters; they are committing larger cheques, taking equity positions, and backing scalable platforms,” said Shobhit Agarwal, CEO, ANAROCK Capital.
He added that the trend indicates India is increasingly being viewed as a core, long-term allocation rather than an opportunistic investment.
Data centres and hospitality gain ground
Office remained the largest recipient of PE capital, accounting for 35 per cent of total inflows in H1 FY27, broadly in line with its 36 per cent share in FY26. Investors continued to favour completed and leased Grade A office assets, which offer stable rental income.
However, data centres emerged as one of the biggest growth areas. Their share of PE inflows jumped to 29 per cent in H1 FY27 from just 4 per cent in FY26, driven by large-ticket investments by foreign platforms.
Hospitality also made a strong comeback, accounting for 12 per cent of inflows in H1 FY27 compared with no PE deals in the previous year.
Residential accounted for 14 per cent of inflows and led in terms of deal count. Nearly 90 per cent of residential capital came through structured debt aimed at project completion.
Industrial and logistics attracted 6 per cent of total inflows, while retail recorded no PE deals during the first half, partly due to a shortage of new Grade A mall supply.
Multi-city platforms attract nearly half of PE capital
Investors also showed a growing preference for platforms operating across multiple cities rather than individual assets.
Pan-India and multi-city deals accounted for 49 per cent of total PE inflows in H1 FY27, sharply higher than the 18 per cent share recorded in FY26.
Among individual cities, Bengaluru accounted for the largest share at 17 per cent, up from 13 per cent in FY26. Pune also saw its share nearly double to 11 per cent from 6 per cent.
In contrast, the combined share of the National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) declined to 16 per cent in H1 FY27 from 40 per cent in FY26.
Equity investments dominate PE inflows
Investor risk appetite also strengthened during the period. Equity investments accounted for 83 per cent of PE inflows in H1 FY27, the highest level since at least FY23.
The equity share stood at 77 per cent in FY26 and 68 per cent in FY23. Meanwhile, the share of structured debt fell to 16 per cent in H1 FY27 from 32 per cent in FY23.
The shift suggests that investors are increasingly willing to take ownership positions in real estate assets and platforms rather than primarily providing project-level financing.
Can FY27 become a record year?
The outlook for the remainder of FY27 remains positive. If PE inflows in H2 FY27 match the H2 FY26 level, total investment for FY27 could reach around $4.8 billion, potentially making it the highest annual PE inflow into Indian real estate in at least five years.
The listing of a sixth REIT during the first half has also strengthened the market by providing private investors with an additional exit route and potentially freeing up capital for new investments.
“We expect the momentum to continue into the second half. Strong office leasing, rising demand for data centres and healthy hotel performance will keep institutional capital flowing,” Agarwal said.
According to ANAROCK, a key factor to watch will be whether domestic investors can sustain investments of more than $1 billion every half.
If that continues, FY27 could emerge as a record year for private equity investment in Indian real estate.
