Private equity investment in Indian real estate declines in H1 of 2025

Private equity (PE) investment in Indian real estate during the first half (H1) of 2025 reflects a market at an inflection point. Not only have the volumes receded sharply, but the very assumptions underpinning investor decision-making are undergoing a foundational rethink, according to Knight Frank India survey on the trends in PE investments in Indian real estate during H1 2025.

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After a robust showing in 2024 with $4.9 billion in inflows, PE investments in H1 2025 dropped by 41% YoY to $1.7 billion. The number of deals also fell steeply, from 24 in H1 2024 to just 12 in H1 2025. This slowdown is not merely due to cyclical caution; rather, it reflects a structural recalibration in the cost of capital, return expectations, and comparative risk appetite among global investors and domestic institutions.

However, India's real estate fundamentals remain intact. Residential sales volumes have held firm, and office absorption has been underpinned by demand from GCCs and technology occupiers. However, the capital market's response has been more cautious. Investors have shown a clear preference for structured equity, credit-backed instruments, and platform-level transactions with predictable exit.