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Real Estate PE Inflow Dips 3% to $3.7 Billion in FY25: Anarock
Real Estate

Real Estate PE Inflow Dips 3% to $3.7 Billion in FY25: Anarock

Private equity (PE) investments in Indian real estate saw a modest 3% decline in FY25, slipping to USD 3.7 billion, as per data released by Anarock Capital. The drop is largely attributed to a slowdown in funding for office assets, amid global macroeconomic uncertainties and geopolitical tensions.

This marks the fifth consecutive year of declining PE inflows, down from USD 6.4 billion in FY21—a cumulative drop of 43%. Foreign investors continued to dominate the landscape, accounting for 84% of total inflows during the fiscal.

Office properties witnessed the sharpest fall, with investments plummeting from USD 2.2 billion in FY24 to USD 806 million in FY25. Despite strong leasing activity, investor sentiment remains cautious, influenced by elevated interest rates and persistent geopolitical risks.

On a more positive note, the warehousing segment saw a surge in inflows, partly offsetting the decline in residential and office investments. The funding structure also shifted, with hybrid deals forming 42% of total inflows, while equity and debt stood at 37% and 21%, respectively.

Analysts suggest the overall moderation signals a more mature and strategic approach to investment, with a focus on quality, income-generating assets. India's resilient economic trajectory and evolving investor preferences are expected to sustain steady capital deployment in the sector going forward.

Private equity (PE) investments in Indian real estate saw a modest 3% decline in FY25, slipping to USD 3.7 billion, as per data released by Anarock Capital. The drop is largely attributed to a slowdown in funding for office assets, amid global macroeconomic uncertainties and geopolitical tensions. This marks the fifth consecutive year of declining PE inflows, down from USD 6.4 billion in FY21—a cumulative drop of 43%. Foreign investors continued to dominate the landscape, accounting for 84% of total inflows during the fiscal. Office properties witnessed the sharpest fall, with investments plummeting from USD 2.2 billion in FY24 to USD 806 million in FY25. Despite strong leasing activity, investor sentiment remains cautious, influenced by elevated interest rates and persistent geopolitical risks. On a more positive note, the warehousing segment saw a surge in inflows, partly offsetting the decline in residential and office investments. The funding structure also shifted, with hybrid deals forming 42% of total inflows, while equity and debt stood at 37% and 21%, respectively. Analysts suggest the overall moderation signals a more mature and strategic approach to investment, with a focus on quality, income-generating assets. India's resilient economic trajectory and evolving investor preferences are expected to sustain steady capital deployment in the sector going forward.

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