Private equity investment in Indian real estate rose 23% year on year to $2.7 billion in the first half of FY27, marking the strongest first-half inflow since H1 FY23, according to the latest FLUX report by Anarock.
PE inflows stood at $2.2 billion in H1 FY26. The $2.7 billion invested between April and September 2026 already represents about 63% of the $4.3 billion invested during the whole of FY26.
Deal activity also broadened during the period, with the number of transactions rising 36% year on year to 30 from 22. Average deal size increased 18% to $91 million.
“The first half of FY27 marks a clear turning point for private equity in Indian real estate,” said Anarock Capital CEO Shobhit Agarwal. He said investors were committing larger cheques, taking equity positions and backing scalable platforms despite the uncertain global backdrop.
Domestic capital jumps nearly six-fold
The sharpest change in the investment landscape was the surge in domestic capital. Domestic investors deployed about $1.3 billion across 24 deals in H1 FY27, nearly six times the $ 220 million invested in H1 FY26.
Their share of total PE inflows rose to 48%, compared with just 16% in FY25. Foreign investors invested about $1.4 billion across six deals, up 19% year on year, retaining a slightly larger 52% share of total inflows.
The difference was more pronounced in deal size. Foreign investors deployed an average of about $ 238 million per deal, against about $ 54 million for domestic investors.
Anarock Group Executive Director & Head – Research & Advisory, Dr Prashant Thakur, said the growing depth of domestic capital from real estate AIFs, family offices and domestic institutions was a structural change. He added that foreign capital had not retreated, with domestic investment adding another layer of funding to the market.
Data centres make a major jump
Office remained the largest individual real estate asset class, accounting for 35% of PE inflows in H1 FY27, broadly stable from 36% in FY26. Investors continued to favour completed, leased Grade A office assets for stable rental income.
The biggest shift came from data centres, whose share surged to 29% from just 4% in FY26. The increase was driven by large-ticket foreign platform investments. Hospitality, which had attracted no PE deals in the previous year, accounted for 12% of inflows in H1 FY27.
Residential accounted for 14% of inflows and led by deal count, although nearly 90% of residential capital came through structured debt for project completion. Industrial and logistics accounted for 6%, while retail received no PE investment during the half, amid a shortage of new Grade A mall supply.
Multi-city platforms attract nearly half the capital
PE investors increasingly favoured platforms spanning multiple cities rather than individual assets. Pan-India and multi-city deals accounted for 49% of total inflows in H1 FY27, sharply higher than 18% in FY26.
Among individual cities, Bengaluru led with a 17% share, up from 13% in FY26, while Pune nearly doubled its share to 11% from 6%. MMR’s share fell to 9% from 17%, while NCR dropped to 7% from 23%.
Chennai accounted for 6% of H1 FY27 inflows, compared with 9% in FY26.
Equity takes 83% of inflows
Investor risk appetite also strengthened, with equity accounting for 83% of PE inflows in H1 FY27, the highest level since at least FY23. The share rose from 77% in FY26 and 68% in FY23.
At the same time, structured debt’s share fell to 16% from 32% in FY23, indicating a greater willingness among investors to take ownership positions rather than lend against projects.
FY27 could become a five-year high
The momentum in the first half puts the Indian real estate PE market on course for a strong FY27. If H2 FY27 inflows match H2 FY26, total PE investment for the year could reach about $4.8 billion, which would be the highest in at least five years.
The listing of a sixth REIT during H1 FY27 has also strengthened the market by providing private investors with an additional exit route and potentially freeing up capital for new transactions.