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India's real estate sector attracted private equity (PE) investments worth USD 6.1 billion across 55 deals in the first nine months of 2026, with data centres emerging as the largest investment destination, accounting for 40 per cent of total inflows, according to a FICCI-Anarock report.
The report titled The Changing Landscape of Real Estate Investment in India, highlighted that data centres attracted USD 2.5 billion in investments, overtaking the office segment, which received USD 1.7 billion during the period. The report noted that PE investments in the first nine months of 2026 neared the USD 6.9 billion recorded in the whole of 2025. If this pace holds, 2026 would be the strongest year since 2007, it noted. The report highlighted a significant rise in domestic investments, with domestic funds contributing USD 2.6 billion in the first nine months of 2026, compared with USD 0.4 billion in 2020. This 6.4-fold increase pushed their share in total private equity investments from 8 per cent to 42 per cent. In the first half of FY27, domestic funds accounted for 48 per cent of total inflows, three times their share in FY25. Meanwhile, foreign investments grew at an annual rate of around 19 per cent between 2021 and 2025, reaching USD 4.9 billion. The report also noted a shift towards equity investments, which accounted for 83 per cent of total inflows in H1 FY27, while the share of structured debt declined to 16 per cent from 32 per cent in FY23. On data centres, the report projected operational capacity to grow by around 30 per cent to 2,200 MW in 2026 and exceed 6.7 GW by 2030, backed by announced investment commitments of over USD 300 billion. As per the report, capital is also spreading beyond the metros. The Mumbai Metropolitan Region took 49 per cent of private equity value between 2021 and 2025. Tier II cities hold only 3 to 4 per cent, but their deals rose from 11 in 2016-20 to 20 in 2021-25, across 12 cities rather than eight, it said. Around 45 per cent of branded hotel keys signed in H1 2026 were located in Tier-III and Tier-IV cities, while 1.4-1.6 GW of data centre capacity is planned outside India's top six cities. Meanwhile, residential sales across the top seven cities reached a record Rs 6.1 lakh crore in FY26, more than double FY22 levels. However, the share of high-end and luxury homes in new supply increased from 13 per cent to 45 per cent, while affordable housing declined from 25 per cent to 14 per cent. Raj Menda, Chairman of the FICCI Committee on Urban Development and Real Estate and Chairman of the Supervisory Board at RMZ, said, Real estate will be the physical platform for Indias growth: offices that compete with the best in the world, homes that are affordable and well located, warehouses and industrial parks that keep supply chains efficient, and data centres that power the digital economy. Deepening domestic capital markets, REITs, small and medium REITs and alternative investment funds, making it easier to build and taking growth beyond the largest metros are the three priorities for industry and government. (ANI)
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