Private equity (PE) investments in India’s real estate sector moderated in H1 2026, reflecting a shift in global capital dynamics rather than any weakening of underlying fundamentals.

Total investments stood at $1.13 billion in H1 2026, down 23 per cent year-on-year (y-o-y) from $1.47 billion recorded in H1 2025.

“This moderation reflects a more cautious and selective investment approach amid elevated global interest rates, tighter liquidity conditions and narrowing yield spreads between emerging and developed markets,” said Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, in the report.

Asset preference

A key trend shaping H1 2026 was the overwhelming preference for the office sector, which accounted for 89 per cent of total PE inflows. Office investments rose 33 per cent y-o-y to nearly $998 million, driven by strong occupier demand from global capability centres (GCCs), multinational corporations and domestic firms.

Investors displayed a clear shift towards income-generating, ready assets, with completed office properties accounting for about 75 per cent of investments, compared to 53 per cent in H1 2025, highlighting a focus on stable cash flows and reduced execution risk.

Housing dip

In contrast, the residential segment witnessed a significant decline, with investments falling to $128 million from $297 million in H1 2025. This reflects a more cautious stance towards development-led opportunities, even as housing demand remains fundamentally strong.

Geographically, investment activity was concentrated in select markets, led by NCR, which emerged as the top destination with $411 million in inflows, followed by Pune and Chennai. Overall, the trend from H1 2025 to H1 2026 indicates a transition from growth-driven capital deployment to a more disciplined, risk-adjusted investment strategy, prioritising yield certainty, asset quality and execution reliability.

Published on June 26, 2026