Indian Real Estate Sees Record $8.5 Billion Institutional Inflows in 2025
The Indian real estate sector witnessed a record-high institutional investment of $8.5 billion in 2025, marking a 29 per cent increase over the previous year, according to a report by Colliers India. This surge in investments underscores the growing confidence of both domestic and foreign investors in the Indian market.
The office sector was the main attraction, with $4.5 billion or 54 per cent of the annual investments coming from it. This is nearly double the level of 2024, driven by the increasing involvement of domestic and foreign investors. The last three months of the year were responsible for almost 66 per cent of the total capital deployment, and there was an impressive demand for Grade A office space in the leading markets of the country.
Domestic institutional capital more than doubled to $4.8 billion, accounting for 57 per cent of total inflows. On the other hand, foreign capital decreased by 16 per cent to $3.7 billion. According to the report, cross-border investments began to recover in the last quarter of the year, which was a sign of a gradual improvement in global investor sentiment. Quarterly inflows were the highest ever for a single quarter in Q4 2025 at $4.2 billion.
The record-high institutional investments in India come at a time when the global economy is showing signs of improvement, with trade normalcy even amid ongoing tariff negotiations. Vimal Nadar, National Director and Head of Research at Colliers India, noted that the year marked the listing of the fourth office-focused REIT and notable acquisitions by older REITs, characterized by superior tenant quality, higher occupancy levels, and strong rental growth. Nadar anticipates greater institutionalization and consolidation in the coming years, with more than 370 million sq ft of existing office space potentially included in future REITs.
Bengaluru and Mumbai, the two leading cities, together constituted approximately 50 per cent of the total real estate investments in 2025, attracting around $4 billion. The office segment accounted for nearly 75 per cent of the overall investment in these cities. Moreover, five out of the seven largest Indian cities registered a rise in capital inflows in 2025 compared to the previous year.
The robust performance of the Indian real estate sector in 2025 highlights the sector's resilience and potential for growth. As global economic conditions continue to improve, the sector is likely to attract even more institutional investments in the coming years.
