Record $5.1 Billion Inflows into Indian Real Estate Driven by Domestic Investors and REITs
India’s real estate sector has recorded strong momentum, with investments hitting a record $5.1 billion in the January–March quarter. This surge is primarily driven by domestic investors and rising Real Estate Investment Trust (REIT) activity. The capital inflows were largely directed toward office assets and mixed-use development in major cities, underscoring sustained confidence in the sector despite global uncertainties.
Mumbai: India’s real estate sector continues to attract strong institutional capital, emerging as a key beneficiary of domestic liquidity and improving confidence in yield-generating assets, even as global macroeconomic uncertainties persist. Capital inflows into the sector rose sharply to a record $5.1 billion in the January-March quarter, marking a 72% on-year increase, according to data from CBRE South Asia. The quarter also saw a 53% sequential growth from $3.3 billion in the previous quarter, reflecting sustained momentum in capital deployment.
The surge in investments was largely driven by domestic investors, who accounted for about 96% of total inflows. Developers led capital deployment with a 42% share, followed closely by REITs at around 40%. Notably, REIT investments crossed $2 billion during the quarter, registering a multi-fold increase compared to the previous quarter.
“This underscores the high confidence of domestic investors and institutional players in the Indian real estate growth story,” said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE. “Despite global macroeconomic headwinds, our resilient economic framework continues to attract deep capital. The multi-fold increase in REIT activity is particularly encouraging, signaling a maturing market that is increasingly shifting towards institutionalized, yield-generating assets.”
Going forward, Magazine expects foreign capital to re-engage strongly, driven by clearer deployment strategies. Investment activity during the quarter was concentrated in built-up office assets and land or development site acquisitions, which together accounted for more than 90% of total equity inflows. A significant portion of capital deployed towards land acquisitions was directed at mixed-use and residential projects, which accounted for over 73% of site-related investments. The remaining capital was allocated to office, warehousing, and hospitality developments.
“We are observing a sustained preference for high-quality office space, underpinned by significant inflows from domestic institutional capital, as well as foreign capital, most notably via REITs,” said Gaurav Kumar, MD & Co-Head, Capital Markets, India, CBRE. “This demand, coupled with increased site acquisitions for mixed-use and residential development, underscores a resilient market outlook. Looking ahead, we expect the next phase of investment to be defined by a strategic balance of yield-focused income assets and high-growth opportunistic plays.”
Geographically, Bengaluru, Mumbai, and Delhi-NCR together accounted for around 65% of the total investment share, reaffirming their dominance as key real estate markets. On the foreign investment front, capital from Singapore and Canada contributed about 72% and 27%, respectively, of total overseas inflows. The formation of new investment and development platforms worth $234 million during the quarter further reinforced the underlying strength of the residential segment alongside the broader investment surge.
