Private Equity in Indian Realty Faces Challenges Amid Global Uncertainty

Private equity (PE) investments in the Indian real estate sector have continued to decline, reflecting the impact of global economic headwinds and shifting investor preferences. According to a report by Anarock, the sector has seen a steady reduction in investment volumes over the past five years, highlighting the challenges faced by the industry.

Key Highlights:
- PE investments in Indian real estate dropped to USD 3.7 billion in FY25, marking a 43% decrease from USD 6.4 billion in FY21.
- The number of deals fell from 51 in FY24 to 39 in FY25, indicating a shift towards fewer but larger transactions.
- Hybrid deals accounted for 42% of total PE capital in FY25, while equity and debt investments stood at 37% and 21%, respectively.
- Foreign investors contributed 84% of the total PE investments in FY25, up from 68% in FY24, showcasing increased international interest.
- The residential sector entered a consolidation phase, with average deal sizes declining significantly.
- Warehousing assets emerged as a bright spot, witnessing a sharp rise in PE investments.

Sources: Business Standard, Hindustan Times, Anarock Official Reports.