India's Real Estate Surge: Can the Momentum Last in APAC?

India has emerged as one of the fastest-growing real estate investment markets in the Asia-Pacific (APAC) region, even as global property markets navigate uncertain macroeconomic conditions. Institutional investments into Indian real estate jumped 29% year-on-year to $8.5 billion in 2025, according to a new report by global property consultancy Colliers. This places India among the strongest-growing markets in the region.

The strong showing comes at a time when investors across APAC are cautiously re-entering property markets after a prolonged period of rising interest rates, volatile capital flows, and pricing mismatches between buyers and sellers. Yet, India’s performance raises an important question: what is driving the country’s relative resilience, and whether the rebound can sustain amid evolving global headwinds.

APAC investments rebound, but selectively

According to Colliers’ Asia Pacific Investment Insights – March 2026 report, total real estate investment volumes across nine major APAC markets — including Australia, Hong Kong, India, Japan, mainland China, New Zealand, Singapore, South Korea, and Taiwan — reached $162 billion in 2025, marking an 8% increase from the previous year. Much of the recovery was back-loaded. Investment activity picked up significantly in the second half of the year, with $87.3 billion worth of deals recorded in H2 2025, representing an 11% increase year-on-year and a 17% jump compared with the first half of the year.

Large and mature markets such as Japan, South Korea, and Singapore continued to dominate overall volumes. However, India and Singapore recorded the fastest growth rates, with investment volumes rising 29% and 35% respectively. The improvement reflects a gradual thaw in investor sentiment as financing conditions stabilised and expectations on asset pricing began to converge.

Why India is outperforming

India’s real estate market has been benefiting from a combination of domestic economic strength, sustained occupier demand, and a relatively favourable supply-demand dynamic in key commercial segments. According to Badal Yagnik, Chief Executive Officer and Managing Director at Colliers India, the country is increasingly emerging as a preferred destination for both domestic and global investors.

“India continues to strengthen its position as a key investment destination within the APAC region, recording one of the strongest growth rates in real estate investments among the nine major APAC markets in 2025,” Yagnik said. The report also highlights that foreign investors accounted for about 43% of the $8.5 billion invested in India, signalling relatively stronger cross-border participation compared with several other markets where domestic capital continues to dominate.

Industry observers say India’s structural growth story — driven by rapid urbanisation, expansion of global capability centres (GCCs), and strong demand for office space — has helped it stand out in the region. At the same time, India has also benefited from the relative slowdown in property markets such as China, where regulatory pressures and developer stress have weighed on investor appetite.

Office assets remain the anchor

Across APAC, office assets continued to dominate real estate investment activity, accounting for the largest share of capital deployment. Office investments in the region rose 21% year-on-year to $58.5 billion in 2025, representing 36% of total real estate investment volumes. India followed a similar trend. According to Vimal Nadar, National Director – Research at Colliers India, office investments alone accounted for around $4.5 billion in India, making up more than half of the country’s institutional real estate inflows during the year.

“Office assets continue to remain the top preference for institutional investors across most APAC markets, including India,” Nadar said, adding that partnerships between global investors and domestic developers are likely to drive large platform deals going forward. Beyond offices, retail and alternative asset classes have also started gaining traction in the region. Retail real estate investments increased 15% year-on-year to $29.7 billion, while alternative assets such as data centres and specialised sectors recorded a sharp 191% surge, highlighting investors’ growing appetite for diversification.

Domestic capital drives the recovery

Another important feature of the APAC property rebound has been the growing role of domestic capital. Across most markets in the region, local investors have stepped in to anchor transaction activity at a time when global capital flows remain cautious. Cross-border participation, however, continues to hold steady in key gateway markets such as Hong Kong, Singapore, and India.

According to Theo Novak, Managing Director for Capital Markets and Investment Services, Asia Pacific at Colliers, investors are now shifting from a defensive stance to a more selective deployment of capital. “We are seeing a shift from caution to conviction,” Novak said, noting that investors are prioritising markets with stronger transparency, depth of capital, and asset quality.

But macro risks still loom

Despite the strong numbers, analysts caution that the recovery in real estate investment flows may not yet be on completely firm ground. The global property sector is still adjusting to the impact of higher borrowing costs, even as central banks in many markets begin signalling a more stable interest rate environment. Financing conditions, particularly for large transactions, remain tighter than during the low-rate cycle of the past decade.

In addition, ongoing geopolitical tensions, trade negotiations, and currency volatility could influence cross-border capital flows in the coming year. Yagnik himself acknowledged that global macro dynamics remain a key monitorable for India’s property market. “While institutional investments in Indian real estate are expected to remain robust through 2026, the impact of global headwinds and ongoing trade negotiations will remain an important factor to watch,” he said.

Market participants also note that while India’s office market continues to attract investors, the sector is not immune to global workplace trends such as hybrid working and changing occupier preferences. Some investors are therefore becoming more selective, focusing primarily on grade-A assets in prime business districts, where occupancy levels and rental growth remain relatively stable.

Outlook for 2026

Looking ahead, Colliers expects real estate investment momentum across APAC to strengthen further in 2026, supported by stabilising interest rates, moderating inflation, and improved clarity around financing conditions. Domestic capital is likely to remain the primary driver of transactions, while cross-border participation could broaden gradually as pricing certainty improves.

For India, the outlook remains broadly positive — underpinned by strong economic growth prospects, expanding corporate occupier demand, and increasing institutional participation. However, the sustainability of the recent investment surge will ultimately depend on whether global macro conditions remain supportive and whether capital markets maintain their appetite for real estate assets.

In other words, India’s real estate story may be gaining strength — but the durability of this momentum will be closely tied to forces well beyond the country’s borders.