Private equity investments in Indian real estate dropped 29% from last year. They reached $3.5 billion in 2025. Office assets still drew the most interest. They made up 58% of inflows, or $2 billion. Knight Frank India’s report notes this. The title is Trends in Private Equity Investments in India: H2 2025.
Knight Frank said PE activity slowed due to higher capital costs. Exit options lacked clarity. Valuations did not match up. Still, GDP growth and low inflation helped the economy.
Office properties pulled in $2 billion. That matches the three-year average. Investors trust these cash-rich commercial spots. Global funds stayed careful.
Residential took 17% of investments. Warehousing got 15%. Retail claimed 11%. The report lists these shares.
Knight Frank’s Capital Markets report covers PE in office, residential, retail, and warehousing. It skips REITs, InvITs, hotels, and data centers. This gives a clear view of core PE moves.
Private equity investors stayed cautious in 2025. Valuations adjusted slowly. That slowed deals. Office and retail operations held strong. Funds picked safe, income-based deals over big bets. The report explains this.
Offices led due to their size, strong setup, and steady cash. They fit PE plans amid high loan costs and careful checks.
Residential drew 17% of PE money in 2025. Deals shifted to loans and structured funds. Investors liked sure cash flows and low risk. Equity went to safe projects with clear progress.
Warehousing ranked third. E-commerce, better supply chains, and factories drove demand. Few ready, big-owned assets limited deals.
Retail saw little action. One big deal ended two years of quiet. It took 11% of PE total.
Shishir Baijal leads Knight Frank India. He said the outlook looks better soon. PE inflows may jump 28% to $4.4 billion in 2026. Government spending, steady rupee, lower inflation, and falling rates will help. New offices add to it.
Recovery will come slow and picky. Not all risks return at once. Offices and warehouses lead gains. Residential and retail stick to structured deals. As rates ease and trust builds, money flows faster from 2026. Best assets have clear paths and lasting cash.