60 deals, $4.3 bn: Domestic investors lead, market hits 7-Yr high in volume

After two muted years, institutional real estate investments rebounded sharply in FY26, with total deal value touching $4.3 billion, marking a 13% rise over FY24 and 16% over FY25, according to ANAROCK Capital.

 

But beyond the headline growth, the real shift lies in who is investing—and how.

 

More deals, smaller tickets: A healthier market emerges

 

FY26 saw 60 transactions—the highest in seven years, compared to 41 deals in FY25.

 

Interestingly, the average deal size dropped to $71 million, not because investors are pulling back, but because:

• More players are entering the market
• Capital is being spread across multiple deals

 

This marks a clear departure from previous years, when one or two mega deals dominated activity. In FY26, the largest deal accounted for just 9% of total value, compared to over 35–40% earlier, noted the report. 

 

 

"India's real estate capital markets have moved from a period of concentration and caution to one of breadth and conviction," said Shobhit Agarwal, CEO – ANAROCK Capital. 

 

 “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.”

 

Here are the highlights:

 

• FY26 deal value hit $4.3 billion, up 13% vs FY24 and 16% vs FY25.

• 60 transactions were recorded in FY26, the highest in seven years.

• The largest deal contributed just 9% of total activity, showing far broader market participation than FY24/FY25.

• Domestic capital rose to USD 1.642 billion, the highest in at least seven years; foreign capital share fell to 52%.

• Commercial office led the market with USD 1.6 billion across 14 deals, while retail made a comeback with 9% of FY26 deal value

 

Equity Dominates; Office Sees a Strong Comeback

Equity continued to be the preferred deal structure, accounting for approximately 77% of total deal value in FY26 — consistent with the long-term norm and a sharp reversal from FY25, when a single large hybrid transaction distorted the mix. Debt accounted for 23%, with no hybrid deals recorded during the year.

 

Sector-wise Performance  Commerical emerges as star performer

 

Commercial office emerged as the standout performer, with 14 transactions aggregating $1.6 billion at an average deal size of $116 million — up from $80 million across 12 transactions in FY25. 

 

Robust office absorption led by Global Capability Centres (GCCs) continued to underpin investor confidence in this segment. 

 

Domestic investors made meaningful inroads into commercial real estate, a segment historically dominated by international capital. 

 

Retail real estate staged a ncomeback after being virtually absent in FY24 and FY25, contributing 9% of deal value in FY26. Blackstone's acquisition of Kolkata's South City Mall for $377 million — the single largest equity deal of the year — anchored activity in this segment, signalling renewed institutional appetite for quality retail assets backed by India's strong consumption growth. 

 

Residential sector: 

Residential saw 26 institutional transactions, broadly in line with prior years, with average deal size remaining stable at $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.

 

Industrial and Logistics:

Industrial & Logistics, after commanding 47% of deal activity in FY25, moderated to 10% in FY26, though underlying investor interest remains firm, driven by e-commerce-led demand and the rapid evolution of warehouses into tech-enabled fulfilment hubs.

 

Domestic Capital at a Multi-Year High

“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," said Aashiesh Agarwaal, SVP - Investment Advisory, ANAROCK Capital.

 

 

Geography: NCR Leads, Pan-India Deals Decline

NCR led city-level deal activity in FY26 with a 23% share, followed by MMR (17%), Bengaluru (13%), and Chennai (9%). 

 

Kolkata, buoyed by the South City Mall acquisition, jumped from 0% in FY25 to 9% in FY26. 

 

The share of Pan-India/multi-city deals fell sharply from 50% in FY25 to 18% in FY26, reflecting a more city-specific capital deployment strategy across investors.

 

Platform Deals Open Fresh Frontiers

Platform investing remained a defining feature of FY26, with HDFC Capital participating in half of all platform transactions — backing Eldeco ($174 Mn), Hero Realty ($ 112 Mn), and Curated Living Solutions for rental housing ($109 Mn). 

 

The year also saw the emergence of differentiated platforms in rental housing and luxury second homes.