NEW DELHI: Private equity investments in the domestic real estate sector declined 23 per cent to USD 1.13 billion during the January-June period amid global uncertainties, according to Knight Frank.
The private equity (PE) fund inflows stood at USD 1.47 billion in the year-ago period.
Real estate consultant Knight Frank India noted that office assets received 89 per cent of the PE investment during the first half of this year, while the residential segment received the remaining equity inflows.
Shishir Baijal, International Partner, Chairman and Managing Director at Knight Frank India, said, “The moderation in private equity investments during H1 2026 is largely a reflection of the evolving global capital environment rather than any deterioration in India’s real estate fundamentals.”
Over the past few years, he said, investors have witnessed a sharp rise in global borrowing costs, reducing the yield advantage that emerging markets traditionally enjoyed.
“Consequently, capital allocation decisions are increasingly influenced by factors such as execution certainty, taxation, liquidity and realised returns,” Baijal said.
As per the data, the PE inflow rose 33 per cent to USD 998 million compared to USD 579 million during H1 2025.
The investments in the residential sector declined to USD 128 million during January-June from USD 297 million in the year-ago period as investors adopted a more cautious and selective approach towards development-led opportunities.
The warehousing and retail sectors did not witness any major PE transactions during H1 2026.
However, the consultant said that the absence of transactions does not indicate a decline in the attractiveness of these asset classes.
