Private equity puts $6.1 billion into Indian real estate

Private equity firms invested $6.1 billion across 55 transactions in Indian real estate in the first nine months of 2026, according to a FICCI-Anarock report released on October 22. The report, titled "The Changing Landscape of Real Estate Investment in India," found that data centres overtook the office segment as the largest destination for private equity capital. The nine-month tally sits close to the $6.9 billion recorded in the whole of 2025.

Data centres attracted $2.5 billion, or 40% of the total private equity inflow, while the office segment drew $1.7 billion. Operational data centre capacity in India is set to grow 30% to 2,200 MW in 2026, with Mumbai holding 53% of current capacity and Chennai 20%. The report projects capacity to exceed 6.7 GW by 2030, backed by announced investment commitments of more than $300 billion. The FICCI-Anarock numbers confirm how quickly digital infrastructure has moved to the front of the queue.

Private equity rides the data centre boom

The standout shift in the report is the rise of domestic money. Domestic funds contributed $2.6 billion in the first nine months of 2026, up from $0.4 billion in 2020, a 6.4-fold increase that lifted their share of total private equity investment from 8% to 42%. In the first half of FY27, domestic funds accounted for 48% of inflows, three times their share in FY25. Foreign investment grew about 19% a year between 2021 and 2025, reaching $4.9 billion.

Domestic funds take a bigger share of private equity

The structure of deals is changing too. Equity investments made up 83% of total inflows in the first half of FY27, while structured debt fell to 16% from 32% in FY23.

Capital spreads beyond the metros

The tier-II story is still small but growing. Tier-II cities hold only 3 to 4% of deal value, but their deals rose from 11 in 2016-20 to 20 in 2021-25, spread across 12 cities rather than eight. Around 45% of branded hotel keys signed in the first half of 2026 were in tier-III and tier-IV cities, and 1.4 to 1.6 GW of data centre capacity is planned outside India's top six cities. The Mumbai region still took nearly half of all value between 2021 and 2025, but the direction of travel is outward.

Residential sales offered a parallel record. Sales across the top seven cities reached Rs 6.1 lakh crore in FY26, more than double FY22 levels. But the mix has shifted. The share of high-end and luxury homes in new supply rose from 13% to 45%, while affordable housing fell from 25% to 14%.

Raj Menda, chairman of the FICCI Committee on Urban Development and Real Estate and chairman of the supervisory board at RMZ, said real estate would be the physical platform for India's growth, pointing to offices, homes, warehouses and the digital infrastructure that powers the economy. He named deepening domestic capital markets, REITs, small and medium REITs and alternative investment funds, and simpler building rules that take growth beyond the largest metros as the priorities for industry and government.

The report said that if the current pace holds, 2026 would be the strongest year for private equity in Indian real estate since 2007, with the $6.1 billion raised across 55 transactions already near last year's full-year total. The pace through September already nears the $6.9 billion of the whole of 2025, leaving the final quarter to decide whether 2026 sets the record the report predicts.