India's real estate capital markets witnessed a strong recovery in FY26, with private equity (PE) deal activity touching a seven-year high, according to a report by ANAROCK Capital.
The sector recorded 60 transactions during the fiscal, with total deal value reaching $4.3 billion, marking a 13% increase over FY24 and a 16% rise compared to FY25.The surge reflects a broad-based improvement in market participation and investor confidence.
Unlike previous years, where deal activity was dominated by a few large transactions, FY26 saw a more distributed capital flow, with the largest deal contributing just 9% of the total value.This indicates a structural shift towards a deeper and more diversified investment landscape.
The number of deals rose sharply from 41 in FY25 to 60 in FY26, the highest in seven years, even as the average deal size declined to $71 million, signalling wider participation across smaller ticket sizes.
Equity remained the dominant investment structure, accounting for approximately 77% of total deal value, while debt contributed 23%, with no hybrid deals recorded during the year.
Among asset classes, commercial office emerged as the top-performing segment, attracting $1.6 billion across 14 transactions, supported by strong leasing demand from Global Capability Centres (GCCs).Retail real estate also staged a comeback, contributing 9% of total deal value, led by large transactions such as Blackstone's acquisition of Kolkata's South City Mall.
Residential activity remained stable with 26 institutional deals, while the industrial and logistics segment saw a moderation in share despite continued investor interest driven by e-commerce and warehouse demand.
A key highlight of FY26 was the sharp rise in domestic capital participation. Domestic investments reached $1.64 billion, the highest in at least seven years, while the share of foreign capital declined to 52%.This shift underscores growing local investor confidence and improving market transparency.
Geographically, NCR led deal activity with a 23% share, followed by Mumbai Metropolitan Region (MMR), Bengaluru and Chennai. The share of pan-India deals declined significantly, indicating a more city-specific investment approach.
Industry experts believe the recovery marks a transition from a cautious and concentrated investment phase to a more mature and broad-based capital market environment, even as global uncertainties persist.