Deal count increased from 22 in H1 FY26 to 30 in H1 FY27, a 36 per cent rise, while the average deal size grew 18 per cent. Screengrab: ANI
PE investment in Indian real estate jumps 23% to $2.7 billion' strongest first half in 4 years
Domestic investors sharply increased their presence as Bengaluru, data centres and multi-city property platforms attracted more investment
For the common man, private equity investment in real estate may sound like a story about large funds and big developers. But the latest numbers point to a broader change in India’s property market, with investors showing renewed confidence and domestic money emerging as a major source of capital.
Private equity (PE) investment in Indian real estate rose 23 per cent year-on-year to USD 2.7 billion in H1 FY27, up from USD 2.2 billion in the same period last year, according to ANAROCK's latest FLUX report. It was the strongest first-half performance since H1 FY23.
The market also saw more transactions. Deal count increased from 22 in H1 FY26 to 30 in H1 FY27, a 36 per cent rise, while the average deal size grew 18 per cent to $91 million.
For ordinary Indians watching property prices, jobs and economic growth, one of the most significant developments is where this money is coming from.
Domestic investors nearly catch up with foreign capital
Domestic investors deployed around $1.3 billion across 24 deals, nearly six times the $220 million invested in H1 FY26. They accounted for 48 per cent of total PE inflows, compared with only 16 per cent in FY25.
Foreign investors invested about $1.43 billion across six deals, up 19 per cent year-on-year. However, foreign investors continued to write much larger cheques, with an average deal size of $238 million, against around $54 million for domestic investors.
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ANAROCK Capital CEO Shobhit Agarwal called the first half a “clear turning point” for private equity in Indian real estate. He said investors are committing larger cheques, taking equity positions and backing scalable platforms, indicating that India is increasingly being viewed as a long-term allocation rather than an opportunistic bet.
Dr Prashant Thakur, executive director and Head of Research & Advisory at ANAROCK Group, said the depth of domestic capital was the biggest structural change in the market. He pointed to real estate AIFs, family offices and domestic institutions gaining the scale and confidence to participate in large transactions.
Bengaluru and Pune gain ground
The regional picture shows that investment is also becoming more diversified.
Bengaluru accounted for 17 per cent of PE inflows, up from 13 per cent in FY26, making it the leading individual city. Pune almost doubled its share from 6 per cent to 11 per cent.
At the same time, traditional investment centres saw their shares decline. MMR fell from 17 per cent to 9 per cent, while NCR dropped sharply from 23 per cent to 7 per cent. Chennai declined from 9 per cent to 6 per cent.
Hyderabad remained at 1 per cent, while Kolkata's share fell from 9 per cent in FY26 to zero in H1 FY27. Other cities accounted for zero in the reported H1 FY27 table.
The biggest geographical shift, however, was towards Pan-India and multi-city platforms. Their share jumped from 18 per cent in FY26 to 49 per cent of inflows in H1 FY27. Investors are increasingly backing businesses operating across several cities rather than concentrating their money in individual properties.
Data centres emerge as a major attraction
The type of property attracting investors is changing too.
Office remained the largest asset class, accounting for 35 per cent of inflows, broadly stable from 36 per cent in FY26. But data centres recorded the sharpest increase, rising from just 4 per cent to 29 per cent.
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Hospitality also emerged as a new area of interest, accounting for 12 per cent after recording no PE deals in the previous year.
Residential accounted for 14 per cent, industrial and logistics for 6 per cent, while retail received no PE deals during the half-year. The report attributed the absence of retail PE deals to a shortage of new Grade A mall supply.
More equity, less debt
Another sign of changing investor confidence is the growing preference for equity. Equity accounted for 83 per cent of PE inflows in H1 FY27, compared with 77 per cent in FY26 and 68 per cent in FY23.
Structured debt, meanwhile, fell to 16 per cent from 32 per cent in FY23. In simple terms, investors are increasingly willing to take ownership positions rather than merely lend money to projects.
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The report estimates that if H2 FY27 matches H2 FY26, total PE investment could reach around $4.8 billion, potentially making FY27 the highest year in at least five years.
For the common man, the immediate impact may not be a fall in property prices. But the numbers suggest that India's real estate market is attracting more capital, from more Indian investors, across more cities and newer types of properties. The bigger question now is whether this momentum can continue through the second half of FY27.
