Japan's Strategic Investment in Indian Real Estate Grows as US and Canada Pull Back
As US and Canadian investors scale back their investments in Indian real estate, Japanese conglomerates are stepping up with significant long-term investments, primarily in commercial assets.
Japanese InvestmentsIndian Real EstateCommercial AssetsInfrastructureEconomic GrowthReal EstateJul 10, 2025
"Japanese conglomerates have sought to grow in India because they are comfortable with and aware of the market, as they seek to enter new geographies in a methodical manner. Besides, India and Japan have extensive diplomatic and corporate relationships, and Japan also has a lot of surplus capital that they want to invest in growth areas," said Vivek Rathi, National Director, Research, Knight Frank India.
The Japanese investments come at a time when legacy foreign investors in Indian real estate, especially from the United States and Canada, are scaling back and seeking exits, often through public listings and outright sales of assets. The relative re-alignment by US and Canadian investors such as Blackstone, Brookfield, CPP Investments, etc., is due to economic uncertainty in those countries, prompting a repatriation of capital, although they remain invested in Indian realty.
According to a recent report from property consultants JLL, Indian real estate pulled in $3.1 billion in institutional investments in the January-June 2025 period, with Asia-Pacific domiciled funds, including those based in Japan, contributing the largest share—37 percent. Since 2021, the Japanese have invested around $2.1 billion in Indian realty, per data shared by JLL.
Over the past three to four years, most major Japanese conglomerates, comprising companies with small cross-holdings but generally independent operations, have lined up extensive investments, mainly in equity, but with some debt as well. These include Marubeni Corporation, Mitsubishi Estate and Mitsubishi Corporation, Mitsui OSK Lines' (MOL) subsidiary Daibiru Corporation, Sumitomo Corporation, and Sumitomo Realty and Development. Others are also evaluating their entry into the Indian market, mainly in income-generating commercial assets such as warehouses, offices, and mixed-use developments.
"India’s robust and sustained economic growth on the global stage has driven investments by Japanese firms. Specifically, we are seeing rising demand for logistics-related real estate, driven by rapid improvement in infrastructure. Geopolitical stability is also spurring interest in data centres and GCCs (Global Capability Centres). In addition, early moves by Japanese firms such as Sumitomo, Mitsubishi, Mitsui, and our own group’s real estate arm, Daibiru, have helped draw further attention from other Japanese companies exploring opportunities in India," said Capt Anand Jayaraman, Executive Officer, South Asia and Middle East, MOL.
While most conglomerates have made equity-led investments largely in commercial assets, Marubeni has been one of the exceptions and invested in residential real estate projects via debt. Marubeni has signed multiple platform deals with Pune-based real estate firm Kolte-Patil Developers, now owned by Blackstone. Unlike most others, Japanese investors have also been ready to invest in land and under-construction assets, signaling a readiness to be part of a project through its entire cycle.
Last year, Daibiru partnered with real estate investment manager Hines to set up a fund at GIFT City, Gandhinagar. From that, it invested Rs 1,000 crore in an under-construction office project in Gurugram, being developed by real estate major DLF. Daibiru and Hines hold a 33 percent stake in the project, facilitating the exit of the Abu Dhabi Investment Authority (ADIA), the sovereign wealth fund. MOL has indicated that it is seeking more investment opportunities in Indian real estate, including in warehousing and logistics assets, which have synergies with MOL's global shipping business.
Among other conglomerates, Mitsubishi and Sumitomo have been major players, along with some of their group firms, such as Mitsubishi Estate and Sumitomo Realty and Development, the latter operating in India through Goisu Realty, a subsidiary. Goisu has been a key mover in the domestic market, having acquired land parcels through purchases or long-term leases in areas such as Mumbai's Worli and Bandra Kurla Complex (BKC).
In May, Mitsubishi Estates and Sumitomo teamed up with Hines to set up a 1.5 million square feet office project on the northern edge of BKC, which entails an investment of around Rs 3,000 crore and has a development potential of about Rs 10,000 crore. The land parcel is owned by the Kanakia Group, a Mumbai-based developer.
Japanese fund sources, such as JICA, which has been associated with the Delhi Metro since the late 1990s, have a long history of investment in Indian infrastructure, from roads and bridges to irrigation systems to multiple metro railways. In Mumbai, JICA has invested around Rs 21,000 crore to help build Mumbai Metro's Aqua Line, which has a total project cost of around Rs 37,000 crore. JICA has stated that since 1958, it has invested nearly Rs 5 lakh crore in Indian infrastructure through official development assistance, in the form of low-coupon, long-tenure loans. JICA is also associated with the under-construction Mumbai-Ahmedabad high-speed railway, funding around 81 percent of the estimated Rs 1.1 lakh crore project cost.
Frequently Asked Questions
Why are Japanese conglomerates investing in Indian real estate?
Japanese conglomerates are investing in Indian real estate to seek new avenues of growth and stable returns, leveraging their comfort and awareness of the Indian market and their surplus capital.
What types of real estate are Japanese companies investing in?
Japanese companies are primarily investing in commercial assets such as warehouses, offices, and mixed-use developments, with some also investing in residential projects via debt.
How are US and Canadian investors reacting to the Indian real estate market?
US and Canadian investors are scaling back their investments in Indian real estate, often through public listings and outright sales of assets, due to economic uncertainty in their home countries.
What is JICA's role in Indian infrastructure?
JICA has a long history of investing in Indian infrastructure, including roads, bridges, irrigation systems, and metro railways, with significant investments in projects like the Mumbai Metro and the Mumbai-Ahmedabad high-speed railway.
Which Japanese companies are major players in the Indian real estate market?
Major Japanese players in the Indian real estate market include Marubeni Corporation, Mitsubishi Estate, Mitsubishi Corporation, Mitsui OSK Lines, Sumitomo Corporation, and Sumitomo Realty and Development.
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