Private equity investments in real estate rise 59 pc to USD 6.7 bn in 2025: Savills India

Kolkata, Jan 2 (PTI) Private equity investments in Indian real estate rose 59 per cent year-on-year to USD 6.7 billion in 2025, marking a return to pre-pandemic levels, property consultancy Savills India said on Friday.

The investments, which include equity deals through the private route, structured debt by Alternative Investment Funds and NCD issuances, were largely driven by overseas institutional capital, with foreign investors accounting for 76 per cent of total inflows, the report said.

The office segment attracted the highest investments at USD 2.4 billion, accounting for 35.3 per cent of total inflows, supported by stable leasing activity and long-term demand visibility. Data centres and residential real estate followed with 23.2 per cent and 21 per cent shares, respectively.

While data centre investments were entirely driven by foreign capital, the residential segment saw equal participation from domestic and overseas investors. Land continued to remain a key asset class, accounting for nearly one-fourth of total equity inflows, with over 60 per cent of land investments aligned towards office and data centre developments.

"Private equity investments in Indian real estate have regained momentum, supported by stable economic growth and improving asset-level fundamentals," said Sumeet Bhatia, Managing Director, Capital Market Services, Savills India, adding that foreign institutional capital is likely to continue anchoring investments going forward.

"The year 2026 will witness a new momentum in real estate growth. Private Equity and REITs are expected to witness significant growth and play a much bigger role. India's real estate sector will see strengthened growth in 2026 due to sustained demand across housing, commercial, and alternative asset classes.

"In a nutshell, the institutional role in India's real estate is gaining momentum. This will accelerate the transition of real estate into the desired industry status," said Saket Mohta, MD, Merlin Group on the development.

Savills India said improved regulatory transparency under RERA, balance sheet consolidation among developers and a sharper focus on asset-level performance have helped strengthen investor confidence in the sector.

Looking ahead, private equity investments in real estate are expected to remain steady at USD 6.5-7.5 billion in 2026, with office assets in core markets, industrial and logistics parks, and data centres continuing to attract institutional capital. PTI BSM NN