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Indian real estate attracted a record USD 2.4 billion in private equity during the first half of 2025, marking a 38 percent increase year-over-year. The rush in capital was particularly intense in Q2, with investments doubling to USD 1.6 billion. While commercial office spaces remained the dominant asset class, there was a marked shift toward land deals, hospitality, and student housing. A surge in land acquisitions accounting for 40 percent of total inflows was led by Mumbai, while foreign institutional investors contributed more than three-quarters of the total, underscoring sustained global confidence in India's real estate potential.
Private equity investments in Indian real estate rose sharply to USD 2.4 billion in the first six months of 2025, marking a 38% jump from the same period last year, according to a recent report by Knight Frank India in collaboration with Altm Research. This growth has been largely driven by a strong performance in the second quarter, where USD 1.6 billion was infused, double the capital invested during the first three months of the year. Advertisement
The commercial office segment continued to be the top recipient of capital, drawing 31% of total private equity inflows in Q2. However, the report highlights an evident shift toward asset class diversification. Retail, hospitality, and student housing cumulatively attracted 16% of the investment during this period, pointing to a strategic expansion in investor focus beyond traditional office assets.
Land deals accounted for a substantial 40% share of the total inflows in H1 2025, up significantly from 13% during the same time last year. This rise indicates growing investor conviction in the long-term potential of land banks and development-linked opportunities. Mumbai led the charge in this space, commanding 67% of land-related transactions. The city continues to maintain its pole position as the top market for PE investors in real estate, thanks to a strong pipeline of development projects, demand resilience, and high asset absorption.
Foreign investors dominated the capital flow, contributing 76% of the total private equity investments during the first half of 2025. This marks a continued trend of global institutional players deepening their footprint in India's real estate market, even amid global economic headwinds.
Noteworthy transactions in Q2 included Blackstone's acquisition of South City Mall in Kolkata for USD 378 million, touted as one of the largest retail deals in the country in recent years. Japanese conglomerate Sumitomo invested USD 295 million in a Mumbai-based infrastructure-linked project, while Brookfield injected USD 151 million into another Mumbai asset, reinforcing global appetite for Indian urban assets.
The data further reflects that while the capital values of assets across sectors are rising gradually, investors are adapting by pivoting towards assets with long-term value potential, including retail spaces in Tier I cities and land in high-growth urban corridors. The emphasis on diversification is also visible in the broader strategy shifts among institutional players.
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