Curation Team
NEW DELHI: Private equity investments in Indian real estate declined 3 pc last fiscal year to USD 3.7 billion due to lower fund inflow in office buildings, according to Anarock. Real estate consultant Anarock’s arm Anarock Capital on Monday released its data of private equity (PE) deals in Indian real estate.
As per the data, the PE investments in real estate declined to USD 3.7 billion in 2024-25 from USD 3.8 billion in the preceding year.
During the 2020-21 fiscal year, the PE inflow was USD 6.4 billion, but the investments fell in 2021-22 to USD 4.3 billion. It marginally improved in the 2022-23 fiscal year to USD 4.4 billion before decreasing in 2023-24.
Shobhit Agarwal, MD & CEO, ANAROCK Capital, said, “PE investments have steadily declined over the past five years, dropping from USD 6.4 billion in FY21 to approximately USD 3.7 billion in FY25. This represents a 43 per cent decrease from FY21 levels, primarily driven by reduced foreign investor activity amid heightened global macroeconomic uncertainty and geopolitical volatility.”
As per the data, the share of foreign investors in total PE investments during the last fiscal year stood at 84 per cent while domestic 16 per cent.
In assets class, office complexes saw a steep decline in investment to USD 806 million in FY25 from USD 2.2 billion in FY24.
“While leasing activity remains robust, investor caution persists due to high interest rates and geopolitical stress,” the consultant said.
The PE investments in warehousing assets rose sharply, compensating for to decline in inflow in housing and office properties.
The last fiscal year saw a significant deviation in funding structure, with hybrid deals surging to 42 per cent of total PE inflow.
Equity and debt investments dropped to 37 per cent and 21 per cent, respectively.
Commenting on the report, Binitha Dalal, Founder & Managing Partner, Mt K Kapital, said, “A marginal 3 per cent dip in PE inflows is more a sign of market recalibration than concern. Investors are becoming more selective, focusing on quality assets and structured opportunities that promise long-term value over short-term gains.”
This also reflects a more mature investment approach, especially in segments like warehousing, commercial, and income-generating residential assets, she added.
“Despite global headwinds, India’s real estate sector continues to hold strong, and we can expect steady, strategic capital deployment going forward,” Dalal said.
Ankur Jalan, CEO, Golden Growth Fund, an Alternative Investment Fund (AIF), said the PE inflows remained flat last fiscal despite global uncertainties.
“India’s growth momentum and rising affluence have given momentum to real estate activity, thereby evincing interest from investors,” he said.
