Real Estate Private Equity Dips Amid Cautionary Trends in India

Private equity investments in Indian real estate dropped to USD 3.46 billion in 2025, down 29% from the previous year, due to reduced funds in housing and warehousing. Office assets, however, saw a rise in investment. Knight Frank forecasts a 28% increase for 2026.

Private equity investments in India's real estate sector have experienced a significant decline, dropping 29% to USD 3.46 billion in 2025, as reported by Knight Frank India. This decrease is attributed to the reduced inflow of funds into housing and warehousing projects.

The analysis, released on Sunday, highlights a cautious stance among investors, despite office assets receiving USD 2 billion—marking a slight increase from USD 1.85 billion in 2024. Meanwhile, retail real estate attracted USD 374 million this year, contrasting with no inflows in the previous year.

Despite improved macroeconomic circumstances, such as GDP growth and inflation, three key factors—effective cost of capital, exit visibility, and valuation alignment—continue to impede private equity deployment. Looking ahead, Knight Frank's Shishir Baijal predicts a 28% rebound in PE investments to USD 4.4 billion in 2026.

(With inputs from agencies.)