The Indian real estate market is poised for significant growth in the coming years. According to a new report by ANAROCK and FICCI titled 'The Changing Landscape of Real Estate Investment,' the value of the Indian real estate market was $600 billion in 2025. It is projected that this figure will increase to $1 trillion by 2030 and could reach $5.8 trillion by 2047.
The report also highlights shifts in investment models. The accelerating role of both foreign and domestic funds is noted. Furthermore, a significant portion of investments is now directed towards assets such as data centers, office buildings, logistics complexes, and other commercial properties.
Over the last two decades, Indian real estate has weathered several major economic and political upheavals. These include the global financial crisis of 2008–2009, a period of political stagnation from 2011 to 2013, the abolition of money printing (notti), changes in RERA and GST, the NBFC crisis in 2018–2019, the coronavirus pandemic, and rising interest rates in 2022–2023.
According to ANAROCK, private equity (PE) investments in real estate fell to $1.1 billion in 2009. Following this, they rose to $7.7 billion in 2017. In 2025, the volume of PE investments stood at $6.9 billion, and in the first nine months of 2026 alone, $6.1 billion in PE investments flowed into the sector, encompassing 55 deals. Of these, $2.5 billion was invested in data centers, and $1.7 billion in office real estate.
Growth in Domestic Fund Contribution
The most significant finding in the report is the increasing role of local investors. In 2020, Indian domestic funds channeled $0.4 billion in PE investments into real estate. By 2025, this amount grew to $1.8 billion. Moreover, in the first nine months of 2026, domestic fund investments reached $2.6 billion, representing an increase of approximately 6.4 times compared to 2020. During this period, the share of domestic funds in the total volume of PE investments was about 42 percent. It is noted that between 2021 and 2025, the average annual growth of foreign PE investments was around 19 percent, indicating that both foreign and domestic capital are vital sources of investment in Indian real estate.
Strong Position of Mumbai and Growth of Deals in Tier-2 Cities
According to the ANAROCK report, from 2021 to 2025, the Mumbai Metropolitan Region (MMR) accounted for 49 percent of the total value of PE investments, while Bangalore held 18 percent. Conversely, the number of deals in tier-2 cities has increased. If 11 PE deals were concluded in these cities from 2016 to 2020, the number rose to 20 from 2021 to 2025. The investment area expanded from 8 to 12 cities. Nevertheless, the share of tier-2 cities in the total value of PE investments remains small—only 3–4 percent, suggesting the dominance of major cities, although the growth potential in smaller towns is increasing. The report also shows that in the first half of 2026, 45 percent of new rooms allocated for branded hotels were located in tier-3 and tier-4 cities, indicating the growing importance of smaller towns in the hospitality and restaurant business.
Growing Investor Interest in Data Centers and Logistics
The investment focus in Indian real estate is also transforming. Investors are no longer limited to residential and office properties; institutional capital is actively being directed towards sectors such as data centers, warehouses, and logistics. According to the report, the share of industrial and logistics sectors in the total volume of PE investments from 2021 to September 2026 was 11.5 percent of the total $33.5 billion. The share of data centers was 9.2 percent. This is significantly higher than the combined share of these two sectors, which was 3.4 percent from 2013 to 2020. Meanwhile, the share of residential real estate decreased from 34 percent during the 2013–2020 period to 21 percent from 2021 to September 2026. However, the decline in the share of PE investments in the residential sector does not imply a drop in housing demand; rather, the sources of financing in the residential sector are changing, driven by the increased role of domestic funds and other financial mechanisms.
Total Value of Under-Construction Real Estate is $503 Billion
According to the ANAROCK report, the total value of under-construction real estate in India was estimated at $503 billion in 2025. Of this amount, $430 billion was allocated to residential real estate, accounting for about 85 percent of the total. The value of commercial real estate was $73 billion. It was noted that the total value of real estate under construction grew from $267 billion in 2019 to $503 billion in 2025. Furthermore, the report forecasts that the real estate sector's contribution to India's GDP may rise from approximately 6 percent in 2017 to 13 percent by 2030.
Future Investment Opportunities
The report's assessment suggests that in the coming years, the role of domestic capital in real estate investments will continue to grow, particularly in areas such as data centers, logistics, hotels, and other fields.
