Latest Data On Indian Real Estate Sector Reveals A Story In Contrast

India's real estate market roared into 2025, logging 28 deals worth a combined $1.2 billion in the first quarter, marking a 133 per cent spike in transaction volumes and a fivefold jump in value over Q1 2024, according to data from the Real Estate Dealtracker Q1 2025 report by Grant Thornton Bharat LLP.

"Commercial and residential development activity has been particularly strong this quarter. The influx of private capital, especially into operational assets and proptech, shows investors are looking for long-term growth stories with tech and flexibility at the core,” said Shabala Shinde, in an official statement.

Despite a 51 per cent dip in value from Q4 2024, when IPOs and QIPs inflated numbers with $1.9 billion in activity, the market showed clear momentum, with private equity (PE) emerging as the main engine of growth. PE transactions made up 88 per cent of deal value this quarter, amounting to $1.05 billion across 17 deals. The average ticket size hit $62 million, the third-highest on record.

“The rise in strategic land deals in Q1 2025 mirrors the industry's willingness to serve the aspirations of changing buyer demands, particularly in high-demand areas such as Delhi-NCR. With homebuyers increasingly looking for lifestyle upgrades, developers are acquiring land parcels that have long-term potential and flexibility for future-ready developments. We see this as a significant boost in the sector, ensuring the growth of the real estate sector in the coming years as well,” said Neeraj Sharma, Managing Director, Escon Infra Realtors, while talking to Outlook Money.

Sustain Properties, Mindspace Business Parks REIT recorded acquisitions valued at $234 million, securing 1.82 million sq feet of office space in Hyderabad. Other top PE deals came from Capital and India Trust and Blackstone-backed Nexus Select Trust.

Additional weight was added by the Blackstone investment worth $134 million made in Kolte-Patil Developers Ltd added more weight to residential property demand. The transaction was among the top five PE transactions in Q1 2025, indicating institutional interest in branded, urban housing platforms.

Despite 11 deals, M&A activity shrank 56 per cent in value to $137 million. Most of the action was driven through domestic consolidation, with Nitco Ltd acquiring four firms to upscale operations. The largest ticket for M&A was done by Mitsubishi Estate Co., which took a 49 per cent stake in Birla Estates for 64 million dollars.

Commercial and residential development and real estate tech comprised 88 per cent of the total deal values. Every day, these (early-stage proptech) investments underscore a growing appetite for tech-enabled, agile models.

Salil Kumar, Director (Sales & Marketing), CRC Group, says: "Undoubtedly, the real estate sector is poised for phenomenal growth. With NCR witnessing massive infrastructure development and the Noida International Airport to commence operations in a few months the sector has huge potential. Announcements such as New Noida and the establishment of mega townships along Yamuna Expressway have also added to the positive sentiments. Coming after reports of muted housing sales and a decline in numbers of new launches this news provides a new thrust to the sector’s growth."

There is still optimism despite the subdued IPO and QIP market, with zero listings during this quarter. Four companies registered and one was listed in Q1, signalling a widening base of developers and investors eager to access capital markets (Small and Medium REITs (SM REITs)).

Yash Miglani, Managing Director, Migsun Group, says: "The surge in land transactions deals, as reflected in the report, is a strong point towards increasing investor confidence in Indian real estate. It is an indicator of renewed confidence to invest capital in this segment, particularly in cities such as Delhi-NCR. The next few quarters could witness even more strategic investments and partnerships, yielding long-term value for both developers and buyers alike."