Indian real estate attracts $3.2 billion PE investments in H1 2026, up 33% YoY: Savills India

Private equity (PE) investment inflows into India's real estate sector rose 33% year-on-year to $3.2 billion (Rs 306 billion) in the first half of 2026, compared to $2.4 billion in the corresponding period last year, according to a report by Savills India.

The momentum remained strong during the second quarter of 2026, with PE investments reaching $2 billion (Rs 190 billion), registering a 25% increase over the same period last year.

Data centres emerged as the biggest recipient of investments during Q2 2026, accounting for 38% of total inflows, bucking the traditional trend of office-led investments. The office segment followed with a 30% share, while residential real estate accounted for 16% of investments during the quarter.


For H1 2026 as a whole, however, the office segment continued to dominate investment activity, accounting for 34% of equity inflows. Investors also diversified their allocations towards alternative real estate segments, with hospitality attracting an 8% share and student housing and co-living accounting for 3% during the period.

Domestic capital accounts for 51% of inflows

Domestic investors drove the majority of PE investment activity in Indian real estate during the first half of 2026, accounting for 51% of overall inflows.

While domestic capital was deployed across multiple asset classes, the office segment remained the preferred investment destination, attracting 68% of domestic investments, largely concentrated across India's tier-I cities.

Foreign investors accounted for the remaining 49% of investments during H1 2026. Of the total foreign capital deployed, 69% originated from the US and Canada, with investments primarily directed towards data centres and the hospitality sector.

"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 the diversification of investments into hospitality, healthcare and student housing/co-living reflects a maturing investor base that is increasingly betting on India's digital and alternative real estate growth story.

Bhatia expects the investment momentum to sustain in the coming quarters as investors deepen their conviction in India's long-term real estate opportunities.

CPPIB-CtrlS deal among key transactions

Among the major transactions during the period was the Canada Pension Plan Investment Board's (CPPIB) $742 million investment in CtrlS Datacenters. This comprised $424 million towards the acquisition of an 8.2% stake in CtrlS and $318 million towards a joint venture for developing hyperscale data centres across India.

Other key deals included 360 One Asset's $156 million investment in CapitaLand and ICICI Prudential Alternatives' $154 million investment in RMZ Group, according to Savills India Research.

The report also showed that institutional investment in Indian real estate stood at $3.4 billion each in 2021 and 2022, before rising to $3.9 billion in 2023, $4.3 billion in 2024 and $6.7 billion in 2025. Investments stood at $1.2 billion in Q1 2026 and accelerated to $2 billion in Q2 2026, according to the chart in the press release.

The growing share of data centres and alternative real estate assets, alongside continued investor interest in traditional office properties, underscores the broadening investment landscape in India's real estate sector.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)