India's Commercial Property Market Sees Deals Worth $2.3 Bn, Investment In Housing Segment Weakens

India's real estate sector recorded a sharp rise in deal activity during the April–June quarter, supported by higher private equity investments and a revival in capital market fundraising. On the other hand, institutional investments in the housing segment weakened significantly during the first half of 2026.

According to Grant Thornton Bharat's quarterly Real Estate/REITs Dealtracker report, the sector registered 39 transactions worth $2.3 billion during April–June, nearly three times the value recorded in the previous quarter.

The report said the rebound was aided by increased fundraising through Initial Public Offerings (IPOs) and Qualified Institutional Placements (QIPs).

Private equity emerged as the largest contributor, accounting for nearly half of the overall deal value, supported by larger transaction sizes, while public market activity also remained robust.

The report showed that merger and acquisition (M&A) activity totalled 22 deals worth $367 million during the quarter, up 10% from $335 million in the corresponding period last year.

In the private equity and venture capital segment, 13 transactions worth $1.157 billion were completed, compared with $458 million a year earlier.

The quarter saw two IPOs raising $381 million and two QIPs mobilising $401 million, taking the combined capital raised through public markets to $782 million, as per the report.

The report identified the $323 million joint investment by Mindspace Business Parks REIT and 360 One Alternates Asset Management Ltd in Radial IT Park Ltd, owned by the CapitaLand group, as the largest transaction of the quarter.

"The quarter reflects growing confidence among institutional investors in India's commercial real estate market," said Bhavik Vora, Partner, Grant Thornton Bharat.

He added the capital is increasingly flowing towards high-quality, income-generating assets, as reflected in the sharp increase in private equity investments and the revival in REIT and capital market activity.

Housing Investments Fall Despite Capital Inflows

A separate report by Cushman & Wakefield said that overall institutional investments across Indian real estate rose 6% year-on-year to $3.46 billion during January–June 2026 from $3.26 billion a year earlier, with domestic investors driving the increase.

However, institutional investment in the housing segment dropped 85% to $154 million, down from about $1.02 billion in the corresponding period last year, the report said.

Investments in retail real estate also declined to $162 million from $542 million, as per the report.

The consultancy said domestic institutions invested $2.2 billion during the first six months of 2026, while foreign investors contributed $1.3 billion, and it expects investment activity to remain resilient through the second half of the year.

By contrast, it noted that the office segment attracted $1.97 billion, more than double the level seen a year earlier, while data centre projects received $839 million, compared with no inflows in the same period last year.

"While office continues to attract a broad spectrum of investors owing to its maturity, liquidity and stable income profile, we are also seeing growing interest in the data centre segment as investors seek to capitalise on India's expanding digital infrastructure ecosystem," said Somy Thomas, Executive MD, Capital Markets at Cushman & Wakefield.

"This diversification of capital is contributing to a deeper and more resilient investment landscape," Thomas remarked.