DIIs Surpass FIIs in Indian Real Estate Investment: A New Era of Domestic Capital Dominance

Domestic institutional investors (DIIs) have surpassed foreign institutional investors (FIIs) in Indian real estate investment for the first time since 2014, according to recent industry data, including insights from JLL’s 2026 report. This shift in capital deployment patterns across asset classes, particularly listed Real Estate Investment Trusts (REITs), marks a structural change in the Indian real estate market.

The transition has been observed over the past year, as domestic capital—comprising mutual funds, insurance firms, and other institutional investors—has increased its allocation to real estate, particularly in income-generating commercial assets. The shift comes amid evolving global investment conditions and a more stable domestic regulatory environment, which has supported local participation.

Ownership patterns in India’s listed REITs further illustrate this change. In Embassy Office Parks REIT, retail and other domestic investors account for 64.62% of the investor base, followed by mutual funds at 23.10%, promoters at 7.69%, and domestic institutional investors (DIIs) at 4.60%. This distribution reflects a strong domestic tilt, with limited direct foreign institutional representation.

Similarly, Mindspace Business Parks REIT shows a promoter-led structure, with promoters holding 66.60%, while retail and other domestic investors account for 25.32%, mutual funds hold 4.78%, and DIIs account for 3.31%. The structure indicates that a significant portion of capital remains within domestic or sponsor-linked entities.

In the case of Nexus Select Trust, retail and other investors form the largest group at 56.28%, followed by mutual funds at 15.80%, strategic institutional investors at 5.62%, and promoters at 2.30%. The relatively diversified investor base highlights growing participation from domestic financial institutions and retail investors in REIT instruments.

Knowledge Realty Trust REIT presents a more promoter-heavy structure, with promoters holding 78.56%, while retail and other investors account for 17.23%, DIIs hold 3.15%, and mutual funds have a smaller 1.06% share. This again underscores the prominence of domestic ownership across REIT platforms.

The data aligns with broader investment trends highlighted in JLL’s 2026 report, which noted that domestic capital has become increasingly active in real estate transactions, supported by improved transparency, regulatory oversight, and stable income yields from commercial assets. The report indicated that domestic investors have been deploying capital more consistently across office, retail, and warehousing segments.

The growing role of DIIs also reflects a maturing investment ecosystem, where institutional frameworks such as REITs have enabled wider participation beyond traditional foreign capital sources. While FIIs continue to play a role in large transactions and platform investments, their relative share has declined compared to the rising contribution from domestic investors.

Overall, the shift in capital flows suggests a rebalancing of India’s real estate investment landscape, with domestic investors emerging as a more dominant and stable source of funding across both direct property transactions and listed REIT structures.