There has been a significant increase in the influx of private equity investments in the Indian real estate industry, growing by a massive 59% year-over-year in 2025, reaching a figure of $6.7 billion. This marks a considerable comeback to the pre-pandemic figures and signifies the renewed faith of institutional investors in the industry. This has largely been fueled by foreign capital, which contributed close to 76% of the investments, as per a report by Savills India.
It explained that market fundamentals have gradually strengthened since the post-pandemic adjustment phase, which has driven the recovery of PE investments. Improved regulatory transparency under RERA, consolidation among developers at the balance sheet level, and a sharper focus on asset-level performance have added to confidence among investors over the past few years.
Office properties were revealed to be the leading source of private equity capital in 2025, accounting for 35.3 percent, or about $2.4 billion, of total PE commitments. This is attributed to constant leasing transactions, visibility for the long term from global corporate occupiers, and the ongoing development of global capability centers (GCCs) across key Indian cities. Bengaluru, Mumbai, Delhi-NCR, and Hyderabad continue to attract maximum PE commitments.
Second was the data centers segment, receiving the second-largest amount of investments, at 23.2% of the PE investments in the given year. According to a note by Savills, investments in the data centers segment in the given year saw foreign investments only, thus citing the international community’s great interest in the rapidly developing data infrastructure segment in India.
Residential real estate was a close second, forming 21% of total private equity investments in 2025. The segment saw well-rounded participation from both domestic and overseas investors, riding on sustained end-user demand, especially in the premium and luxury housing segments. Institutional investors continued to favour projects by established developers with strong execution track records and clear exit visibility.
Industrial and logistics assets comprised 9% of the total PE inflows, undergirded by demand linked to supply chain diversification, manufacturing-led growth, and the increasing move toward organized warehousing. Retail and hospitality assets accounted for 6% and 5% of investments, respectively, as selectively capital moved back into consumption-led segments on the improvement in economic conditions. Co-living and student housing remained nascent, together accounting for just 0.5% of the total investments.
Real estate also remained prominent as an invest theme in the year, constituting roughly one-fourth of total equity investment. Over 60 percent of total real estate transactions can be categorized as being strategic towards future office and data center projects, thus indicating the need for wealth-generating platforms.
Private equity investments into Indian real estate have regained momentum, supported by stable economic growth and improving asset-level fundamentals,” stated Sumeet Bhatia, Managing Director, Capital Market Services, Savills India. He added that institutional capital is increasingly being deployed into income-generating assets such as office buildings, industrial and logistics parks, and data centres, reflecting a more disciplined investment approach.
Going forward, the outlook for private equity investment in the Indian real estate sector by Savills India is expected to be the same in the year 2026, with investments in the range of $6.5-$7.5 billion. Office spaces in prime locations are set to see maximum institutional funds, while the industrial and logistics parks are expected to be driven as a result of the manufacturing sector.
Data Centre real estates are set to experience constant influx of investment, thanks to growing adoption of digital technology, as well as cloud adoption. The residential realty sector will also experience constant PE penetration, led by high-end residential realty.
The alternate asset classes such as student housing, co-living, seniors housing, and life science real estates will slowly pick up pace, although they will start from a small level. The report also pointed out that the emergence of real estate investment trusts (REITs) in the Indian market is resulting in increased exit opportunities and is thus improving the outlook of private equity investments.
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