Real Estate Stumbles: Challenges and Optimism in Indian Private Equity

The Indian real estate sector experienced a 15% decline in private equity investments in the July-September quarter, amounting to USD 819 million, as highlighted by Anarock, a property consultancy firm. The decrease, attributed to global uncertainties, is a reflection of a broader trend as investments stood at USD 967 million during the same period last year.

In the first half of the 2025-26 fiscal year, there was a noticeable reduction in private equity flows, dropping from USD 2.6 billion to USD 2.2 billion compared to the previous year, according to Anarock Capital data. Significantly, 73% of investments in the current fiscal's first half came from foreign capital, indicating a sustained interest from overseas investors despite prevailing global uncertainties.

Shobhit Agarwal, CEO of Anarock Capital, noted that while residential sales remain strong, enhancing cash flows for developers and reducing their reliance on costly AIFs, commercial real estate faces challenges from ongoing geopolitical issues like the Russia-Ukraine conflict, impacting global funding flows. Despite these concerns, India is seen as a growth market, with expectations of recovery as uncertainties resolve.

(With inputs from agencies.)