Realty sector sees 16% rise in PE deals, volumes at 7-year high

India’s real estate sector recorded private equity (PE) deals worth $4.3 billion in FY26 — a rise of 13% and 16% over FY24 and FY25, respectively —according to Anarock Capital’s FLUX FY26 report.

The number of transactions rose to 60 in FY26, the highest in seven years and up sharply from 41 deals in FY25, it said. Average deal size, at $ 71 million, was the lowest in the same period — a reflection not of declining appetite but of wider market participation with more players transacting across a broader ticket-size spectrum — it added.

Equity continued to be the preferred deal structure, accounting for nearly 77% of total deal value in FY26 — consistent with the long-term norm and a sharp reversal from FY25, when a single large hybrid transaction distorted the mix. Debt accounted for 23%, with no hybrid deals recorded during the year, it said.

“FY26’s recovery is especially significant for its quality. Unlike FY24 and FY25 — when a single mega transaction (Brookfield RE Trust/GIC and RIL/ADIA/KKR, respectively) accounted for 37% and 41% of total deal value — the largest deal in FY26 contributed just 9% of total activity,” said Shobhit Agarwal, CEO – Anarock Capital.

This marks a structural improvement in market depth, with capital flows distributed more evenly across geographies, sectors, and asset classes, Agarwal said.

Commercial office emerged as the standout performer, with 14 transactions aggregating $ 1.6 billion at an average deal size of around $ 116 million — up from around $80 million across 12 transactions in FY25. Robust office absorption led by global capability centres (GCCs) continued to underpin investor confidence in this segment. Notably, domestic investors made meaningful inroads into commercial real estate, a segment historically dominated by international capital, it said.

Anarock Capital said retail real estate staged a notable comeback after being virtually absent in FY24 and FY25, contributing 9% of deal value in FY26. Blackstone’s acquisition of Kolkata’s South City Mall for $ 377 million — the single-largest equity deal of the year — anchored activity in this segment, signalling renewed institutional appetite for quality retail assets backed by India’s strong consumption growth, it said.

Residential saw 26 institutional transactions, broadly in line with prior years, with average deal size remaining stable at ~$ 25 million. Strong banking sector support — evidenced by high-teen growth in outstanding credit — continues to provide developers with a more cost-effective funding alternative to private equity. Nevertheless, institutional platforms remained active, particularly for established and credible developers, it said.

Aashiesh Agarwaal, SVP – investment advisory, Anarock Capital, said, “One of the most consequential trends is the accelerating rise of domestic capital. Foreign investors’ share of total deal value fell from 82% in FY22 to 52% in FY26, while domestic investors’ share rose from 15% to 38% over the same period — with domestic capital in absolute terms reaching $1,642 million, the highest in at least seven years. Rising domestic prosperity, improved market transparency, and growing local conviction in real estate as an asset class are driving this shift.”