India real estate capital markets witnessed a strong recovery in FY2025-26, with total deal value reaching $4.3 billion, according to Anarock Capital’s FLUX FY26 Annual Edition. The sector rebounded sharply after two years of subdued activity, returning to levels last seen in FY2021-22. The deal value marked a 13% increase over FY2023-24 and a 16% rise compared to FY2024-25, driven by broader participation across investors and asset classes.

Key Highlights

• India real estate capital markets deals rise to $4.3 billion in FY26.
• Deal activity hits 7-year high with 60 transactions.
• Domestic capital surges as foreign investor share declines.

Deal Activity Surges to 7-Year High

India’s real estate investment landscape saw a significant jump in transaction volumes, with 60 deals recorded during FY26- the highest in seven years, up from 41 deals in FY25.

Unlike previous years dominated by large transactions, FY26 saw a more distributed capital flow. The largest deal accounted for only 9% of total value, compared to 37-41% in earlier years, indicating improved market depth and diversification.

Average deal size declined to $71 million, reflecting increased participation across a wider range of investors rather than weakening demand.

Equity remained the preferred investment route, accounting for 77% of total deal value, while debt contributed 23%. The absence of hybrid deals in FY26 marked a return to more traditional funding structures.

This shift highlights growing investor confidence and a more stable capital environment compared to previous years impacted by large one-off transactions.

Commercial office assets emerged as the top-performing segment, attracting $1.6 billion across 14 deals. Strong demand from Global Capability Centres (GCCs) continued to drive investor interest and leasing activity.

Retail real estate also staged a comeback, contributing 9% of total deal value. A key highlight was Blackstone’s $377 million acquisition of South City Mall in Kolkata, signaling renewed institutional confidence in consumption-driven assets.

Meanwhile, the residential segment saw 26 institutional transactions, broadly in line with prior years, with average deal size remaining stable at USD 25 million. Strong banking sector support - evidenced by high-teen growth in outstanding credit — continues to provide developers with a more cost-effective funding alternative to private equity. Nevertheless, institutional platforms remained active, particularly for established and credible developers.

According to Shobhit Agarwal, CEO of Anarock Capital, "India's real estate capital markets have moved from a period of concentration and caution to one of breadth and conviction.. FLUX FY26 captures a market that is deepening - more deals, more participants, more asset classes - even as it navigates a complex global backdrop.”

He added, “FY26's recovery is especially significant for its quality. Unlike FY24 and FY25 - where a single mega-transaction (Brookfield RE Trust/GIC and RIL/ADIA/KKR, respectively) accounted for 37% and 41% of total deal value - the largest deal in FY26 contributed just 9% of total activity. This marks a structural improvement in market depth, with capital flows distributed more evenly across geographies, sectors, and asset classes.”

The industrial and logistics segment saw its share decline to 10% from 47% in FY25, though investor interest remains intact due to e-commerce growth and tech-enabled warehousing.

City-wise, NCR led deal activity with a 23% share, followed by Mumbai (17%), Bengaluru (13%), and Chennai (9%), indicating a more targeted and city-specific investment approach.

Aashiesh Agarwaal, SVP - Investment Advisory, ANAROCK Capital, said, “One of the most consequential trends is the accelerating rise of domestic capital. Foreign investors' share of total deal value fell from 82% in FY22 to 52% in FY26, while domestic investors' share rose from 15% to 38% over the same period — with domestic capital in absolute terms reaching USD 1,642 million, the highest in at least seven years. Rising domestic prosperity, improved market transparency, and growing local conviction in real estate as an asset class are driving this shift.”

Also Read: Prestige Estates Reports Record Pre-sales of Rs 30,024 Crore in FY26

Financial Trends: Domestic Capital Gains Momentum

A major structural shift in FY26 was the rise of domestic capital in India’s real estate sector.

• Domestic investors’ share increased to 38% from 15% in FY22
• Foreign investor contribution declined to 52% from 82%
• Domestic investments reached $1.64 billion, a multi-year high

This trend reflects growing domestic wealth, improved market transparency, and increasing confidence in real estate as a long-term asset class.