Data Centres Drive 33% Rise in Indian Real Estate PE to $3.2bn
Private equity inflows into Indian real estate surged 33% to $3.2 billion in the first half of 2026, driven by a structural shift toward data centre infrastructure as investors broaden their portfolios beyond traditional office assets.
Private equity groups poured $3.2 billion into Indian real estate during the first half of 2026, marking a 33% increase from the same period a year earlier. The pace of deployment accelerated notably in the second quarter, with investments reaching $2 billion, a 25% year-on-year increase.
The most significant shift in the latest data was the emergence of data centres as the primary destination for capital. During the second quarter, digital infrastructure accounted for 38% of all inflows, overtaking the traditional office sector which secured a 30% share. For market participants, this signals that institutional investors are now explicitly underwriting India's expanding digital economy through direct real estate allocations.
Over the full six-month period, office space retained its position as the largest overall asset class, capturing 34% of total equity inflows. However, the broader investment landscape is clearly diversifying. Capital is flowing into alternative segments, with hospitality attracting an 8% share and specialised residential formats like student housing and co-living accounting for 3% of the total market.
A notable evolution in the market's capital structure is the rising dominance of domestic money. Local investors accounted for 51% of first-half inflows, overtaking foreign capital. This domestic liquidity remains highly concentrated in familiar assets, with 68% of local deployments directed at office developments, primarily located across India's tier-one cities.
The pivot toward data infrastructure is exemplified by the Canada Pension Plan Investment Board's $742 million commitment to CtrlS Datacenters. The deal structure involved $424 million for an 8.2% equity stake and a separate $318 million joint venture dedicated to developing hyperscale facilities. Additional major transactions included 360 One Asset's $156 million investment in CapitaLand and ICICI Prudential Alternatives' $154 million injection into RMZ Group.
These figures represent a sharp acceleration from prior years. Institutional investment stood at $3.4 billion annually in both 2021 and 2022, before climbing to $6.7 billion last year. With first-quarter inflows already at $1.2 billion before the second-quarter surge, the sector is on track to test new highs. "Bhatia expects the investment momentum to sustain in the coming quarters as investors deepen their conviction in India's long-term real estate opportunities."
