Private equity (PE) investments in India's real estate sector rose 33% year-on-year to $3.2 billion (around ₹306 billion) during the first half of 2026, underlining sustained investor confidence in the country's property market amid growing interest in alternative asset classes, according to a report by real estate consultancy Savills India.
Key Highlights
- PE investments in India's real estate rose 33% to $3.2 billion in H1 2026, per Savills.
- Data centres overtook offices as the top investment destination in Q2, capturing a 38% share.
In the April-June quarter alone, institutional PE inflows stood at $2 billion (around Rs 190 billion), up 25% from the corresponding period last year. Savills noted that institutional investments include PE transactions executed through the private route, structured debt deals by alternative investment funds (AIFs), and non-convertible debenture (NCD) issuances, while excluding plain debt fund raises, QIPs, public market transactions, and platform formations.
Data Centres Overtake Offices as Top Investment Destination
A notable trend during Q2 was the emergence of data centres as the largest investment destination, accounting for 38% of total inflows and overtaking the traditionally dominant office segment. Office assets attracted 30% of investments during the quarter, while the residential segment accounted for 16%. On a cumulative H1 basis, however, office remained the largest asset class overall with a 34% share of equity inflows. Hospitality secured 8% of investments, while student housing and co-living assets contributed 3%, reflecting growing investor appetite for alternative real estate segments.
Domestic investors contributed 51% of total PE inflows during H1 2026, deploying capital across multiple asset classes, with office assets remaining their preferred avenue at 68% of domestic investments, largely concentrated in Tier-I cities. Foreign investors accounted for the remaining 49% of inflows, with 69% of overseas capital originating from the US and Canada, primarily targeting data centres and hospitality assets.
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"PE inflows in the first half of 2026 reaffirm the growing confidence investors have in India's real estate market. While office remains a core allocation for investors, the period's standout was the sharp rise in Data Centre investments," said Sumeet Bhatia, Managing Director, Capital Market Services, Savills India. He added that continued diversification into hospitality, healthcare, and student housing/co-living reflects a maturing investor base increasingly betting on India's digital and alternative real estate growth story, with the momentum expected to sustain through coming quarters.
Largest Deals of the Period
Among the largest transactions during H1 2026, the Canada Pension Plan Investment Board (CPPIB) invested $742 million in CtrlS Datacenters, including $424 million for an 8.2% stake acquisition and $318 million through a joint venture to develop hyperscale data centres across India. Other key deals included 360 One Asset's $156 million investment in CapitaLand and ICICI Prudential' $154 million investment in RMZ Group.
