Curation Team
NEW DELHI: India’s real estate sector saw a measured slowdown in deal momentum in the second quarter of 2025, with total deal value declining 35% quarter-on-quarter to USD 775 million, even as institutional capital remained firmly behind commercial assets and structured investments, according to a report by Grant Thornton Bharat.
A total of 17 deals were recorded in the quarter, down from 28 in Q1 2025, marking a 39% drop in overall volumes. Despite the decline, the quarter was underpinned by a few large-value transactions that together contributed over 90% of the total deal value. Blackstone’s USD 378 million acquisition of South City Mall in Kolkata emerged as the standout deal, reinforcing investor preference for operationally stable, income-yielding assets in retail and commercial segments.
Commercial development shines; residential, tech taper off
Commercial development led the charge in Q2, accounting for 38% of all deals and 62% of deal value. Apart from Blackstone, the Prime Offices Fund’s USD 87 million investment in Prius Platinum, a Grade A office property in South Delhi, added to the segment’s strength.
In contrast, residential and proptech saw muted action. Residential assets accounted for 23% of volume but just 10% of value, while proptech slipped to 15% of volume and 5% of deal value, down sharply from the previous quarter’s highs. Notably, Lighthouse Funds backed Knest Manufacturers with a USD 35 million cheque, and Qatar Development Bank supported Alt DRX, a tokenised property platform, signalling early bets on digital disruption.
M&A resilient in value, weaker in volume
Mergers and acquisitions recorded six deals totaling USD 195 million—a 45% decline in volume from Q1, but a 42% jump in value. Domestic consolidation drove most of the activity, with Max Estates’ acquisition of Boulevard Projects in Noida for USD 161 million leading the chart.
Inbound and outbound activity remained subdued for the second consecutive quarter, underscoring a growing domestic orientation in dealmaking. A rare cross-sector move saw DPF Textiles acquiring CCCL Infrastructure, marking a diversification into real estate from manufacturing.
Private equity cautious, capital markets rebound
Private equity deal count fell to seven, compared to 17 in the previous quarter, but one large transaction—Blackstone’s South City Mall deal—accounted for much of the USD 580 million invested. Overall, PE volume declined 59%, and value dropped 45% quarter-on-quarter.
On a brighter note, the capital markets began stirring. Two IPOs and two QIPs were completed in Q2, raising USD 243 million and USD 245 million respectively. Kalpataru alone secured USD 268 million through both routes. In a significant development, an SM REIT also received SEBI nod, pointing toward increasing democratization of income-generating real estate platforms.
Outlook: cautious optimism for H2 2025
The report notes that investor sentiment is shifting toward fewer but larger bets, favouring commercial resilience and platforms with scale. With India’s largest-ever REIT IPO expected in H2 and sustained traction in SM REITs, the ecosystem is evolving toward deeper capital markets participation.
“Commercial real estate continues to anchor the growth narrative even as other segments witness recalibration. The cautious optimism is supported by strategic interest in platform-led growth and yield-focused investments,” said Shabala Shinde, partner and Real Estate Leader, Grant Thornton Bharat LLP.
