India’s real estate sector recorded a 63% QoQ decline in deal value to $763 million during the January-March quarter of 2026 across 32 deals from $2,083 million in the previous quarter, mainly due to the absence of large-ticket transactions, according to a report by Grant Thornton Bharat.
“Deal volumes, including IPO and QIP activity, increased from 26 in Q4 2025 to 32 in Q1 2026 and rose from 28 deals a year ago (up by 14%), while total deal value declined significantly from $2,083 million in the previous quarter, marking one of the lowest quarterly values since Q4 2023,” the report said.
The report said the divergence between higher deal volumes and lower values signals a shift toward smaller and mid-sized transactions, as investors adopt a more cautious and selective approach amid global macroeconomic and geopolitical uncertainties.
Chan Chakravarti, a global real estate investor and capital strategist who has closely tracked commercial real estate evolution, said that while deal volumes in Q1 2026 signal continued resilience in India’s real estate sector, the sharp decline in overall values reflected a clear shift in investor behaviour, from large, opportunistic bets to more calibrated, mid-market transactions.
Mid-sized deals drive activity
The report pointed out that mergers and acquisitions (M&A) activity accounted for 19 deals worth $305 million during the quarter. While transaction volumes improved, values dropped sharply due to the lack of major acquisitions. The largest M&A transaction was RSVM Hospitality Pvt Ltd’s acquisition of an 18.6-acre land parcel in Thane from the Neterwala Group for $55 million.
Private equity (PE) and venture capital investments stood at 13 deals worth $458 million, marking the highest quarterly volumes in the last one year. However, values fell 71% sequentially, reflecting the absence of a mega deal seen in the previous quarter.
The average PE deal size also declined significantly from USD 80 million in Q4 2025 to USD 23.8 million in Q1 2026, indicating a return to smaller-ticket investments spread across multiple assets, it said.
According to the report, commercial development remained the preferred segment, contributing 42% of M&A volumes and 78% of PE values, supported by stable rental yields and income visibility in office and retail assets.
Residential development also saw renewed investor interest, with the number of deals rising from one in the previous quarter to six deals worth around $178 million.
“Consultancy and services continued to see subdued activity, with 2 deals totaling USD 8 million, largely limited to bolt-on acquisitions,” the report said.
Shabala Shinde, Partner and Real Estate Industry Leader, Grant Thornton Bharat, pointed out that Q1 2026 reflected a stable yet measured start for India’s real estate sector, with deal volumes improving even as overall values corrected sharply due to the absence of large-ticket transactions. “The quarter saw a clear shift towards mid-sized and income-generating assets, with domestic activity continuing to dominate and private equity remaining a key source of capital.”
“Investment trends indicate a strong preference for commercial assets, particularly office and retail platforms, supported by yield visibility and stable cash flows, while REIT-led transactions continue to reinforce institutional confidence in high-quality, income-generating assets,” he said.