India real estate PE inflows jump 33% to $3.2 billion in H1 2026 as data centres emerge as top investment magnet: Savills India
Domestic investors accounted for 51% of capital deployed during the first half of 2026, while North American funds continued to back data centres and hospitality assets.
Private equity (PE) investments in India's real estate sector rose 33% year-on-year to $3.2 billion (around ₹306 billion) during the first half of 2026, underlining sustained investor confidence in the country's property market amid growing interest in alternative asset classes, according to a report by real estate consultancy Savills India.
In the April-June quarter alone, institutional PE inflows stood at $2 billion (around ₹190 billion), up 25% from the corresponding period last year.
Savills noted that institutional investments include private equity transactions executed through the private route, structured debt deals by alternative investment funds (AIFs) and non-convertible debenture (NCD) issuances, while excluding plain debt fund raises, qualified institutional placements (QIPs), public market transactions and platform formations.
Data centres overtake offices in Q2
A notable trend during the second quarter was the emergence of data centres as the largest investment destination, accounting for 38% of total inflows and overtaking the traditionally dominant office segment. Office assets attracted 30% of investments during the quarter, while the residential segment accounted for 16%. However, on a cumulative H1 basis, office remained the largest asset class with a 34% share of equity inflows. Hospitality secured 8% of investments, while student housing and co-living assets contributed 3%, reflecting increasing investor appetite for alternative real estate segments.
Domestic capital takes the lead
The report showed that domestic investors contributed 51% of total PE inflows during the first six months of 2026, deploying capital across multiple asset classes. Office assets remained the preferred investment avenue for Indian investors, accounting for 68% of domestic investments, largely concentrated in Tier-I cities. Foreign investors accounted for the remaining 49% of inflows, with 69% of overseas capital originating from the US and Canada, primarily targeting data centres and hospitality assets.
"PE inflows in the first half of 2026 reaffirm the growing confidence investors have in India's real estate market. While office remains a core allocation for investors, the period's standout was the sharp rise in Data Centre investments. This, alongside continued diversification into hospitality, healthcare, and student housing/co-living, reflects a maturing investor base that is increasingly betting on India's digital and alternative real estate growth story. We expect this momentum to sustain through the coming quarters, as investors deepen their conviction in India's long-term, opportunity-rich real estate landscape," said Sumeet Bhatia, Managing Director, Capital Market Services, Savills India.
CPPIB's CtrlS deal tops investment chart
Among the largest transactions during the period, the Canada Pension Plan Investment Board (CPPIB) invested $742 million in CtrlS Datacenters, including $424 million for an 8.2% stake acquisition and $318 million through a joint venture to develop hyperscale data centres across India. Other key deals included 360 One Asset's $156 million investment in CapitaLand and ICICI Prudential Alternatives' $154 million investment in RMZ Group.