India is a large and robust economy on a fast growth trajectory, but not every investor who has entered the market has had success. Having experienced the initial wave of foreign capital flows into India’s property markets, collective wisdom now focuses on finding the appropriate balance of risk and reward in this emerging market.

The pre–global financial crisis period of 2006 and 2007 saw private equity investments in Indian real estate peak. During this period, economic growth was robust, and favourable demographic factors resulted in an increase in demand for residential and other commercial projects. This induced a lot of foreign private equity funds to invest in emerging economies such as India, and predominantly in nonresidential commercial real estate.

After the financial crisis, foreign flows contracted and, as a result, investments declined considerably. Though the impact on India was limited vis-a-vis developed economies, an overall decline in economic ac