New Delhi, Oct 22: India's real estate sector attracted USD 6.1 billion in private equity (PE) investments across 55 deals in the first nine months of 2026, with data centres emerging as the largest investment destination amid growing demand for artificial intelligence (AI) infrastructure and digital services.

The findings are part of a report published by FICCI-Anarock titledThe Changing Landscape of Real Estate Investment in India, which highlights a shift in investor interest towards data centres, alongside rising domestic capital participation and expanding investment opportunities beyond major metropolitan cities.

Data centres attracted USD 2.5 billion, accounting for 40 per cent of total private equity inflows during January-September 2026. The segment overtook office real estate, which received USD 1.7 billion, reflecting the growing importance of digital infrastructure as businesses adopt AI, cloud computing and data-intensive technologies.

The report noted that private equity investments during the first nine months of 2026 came close to the USD 6.9 billion recorded throughout 2025. If the current pace continues, 2026 could become the strongest year for real estate private equity investments since 2007.

India's data centre capacity is projected to increase by around 30 per cent to 2,200 megawatts in 2026 and exceed 6.7 gigawatts by 2030. Announced investment commitments of more than USD 300 billion underline the scale of opportunities in the sector, supported by rising data consumption, AI adoption and demand for computing infrastructure.

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Investment patterns are also changing, with domestic funds playing a larger role. Domestic private equity investments reached USD 2.6 billion in the first nine months of 2026, compared with USD 400 million in 2020. Their share of total investments rose from 8 per cent to 42 per cent over the period.

During the first half of FY27, domestic funds accounted for 48 per cent of total inflows. The report also found a shift towards equity investments, which represented 83 per cent of inflows in the period, while structured debt's share declined to 16 per cent from 32 per cent in FY23.

Geographically, investment activity is gradually extending beyond established markets. The Mumbai Metropolitan Region accounted for 49 per cent of private equity investment value between 2021 and 2025. Although Tier-II cities represented only 3-4 per cent of investment value, the number of deals increased from 11 in 2016-20 to 20 in 2021-25, spanning 12 cities.

The expansion is visible in digital infrastructure as well, with 1.4-1.6 GW of data centre capacity planned outside India's six largest cities. Around 45 per cent of branded hotel keys signed in the first half of 2026 were also located in Tier-III and Tier-IV cities.

Meanwhile, residential sales across India's top seven cities reached a record Rs 6.1 lakh crore in FY26, more than double the FY22 level. However, the share of high-end and luxury homes in new supply rose from 13 per cent to 45 per cent, while affordable housing's share declined from 25 per cent to 14 per cent.

The investment trends indicate that AI-driven digital infrastructure is becoming a major force shaping India's real estate market, even as investors diversify their portfolios across property segments and emerging urban centres. (with ANI inputs)