Record $8.5 Billion in Institutional Investments Spur Indian Real Estate Market in 2025
Institutional investments in Indian real estate reached an all-time high of $8.5 billion in 2025, marking a 29% year-on-year (YoY) growth. This significant rise was primarily driven by a record capital deployment of $4.2 billion in the fourth quarter of 2025, the highest ever in a single quarter, according to Colliers India.
This new milestone comes at a time when the global economy is showing signs of improvement, with trade normalcy even amid ongoing tariff negotiations. India’s growing economic prospects and expanding investment horizons have further solidified its position as a major destination for global capital across various sectors, including real estate.
Domestic institutional capital played a pivotal role in the surge of real estate investments in 2025. Inflows from domestic sources more than doubled year-on-year to $4.8 billion, accounting for 57% of the total investment volume for the year. This robust growth reflects the growing confidence among Indian institutional investors, bolstered by improved asset quality, stable returns, and enhanced market transparency.
On the other hand, foreign capital deployment saw a 16% year-on-year decline to $3.7 billion in 2025. However, the final quarter of the year witnessed a recovery in cross-border investments, hinting at a gradual improvement in global investor sentiment.
Office assets continued to dominate the investment landscape in 2025, accounting for 54% of the annual inflows. The residential segment followed with $1.6 billion of investments, marking a 36% year-on-year growth and representing an 18% share of the total investments. Mixed-use, retail, and alternative assets also saw significant traction, totaling about $1.5 billion and constituting nearly 17% of the total investments for the year.
“During 2025, office assets remained the primary focus of institutional investors, driven by strong grade A space uptake across major office markets. The residential segment also saw substantial growth, reflecting the sector's resilience and potential. Looking ahead, we expect institutional investments to further strengthen, supported by expanding domestic capital, improving global risk appetite, and India’s robust economic fundamentals,” said Badal Yagnik, CEO and Managing Director of Colliers India.
The Indian office market received $4.5 billion in investments in 2025, almost double the levels in 2024. The final quarter alone accounted for nearly two-thirds of the annual capital deployment, coinciding with strong demand for grade A office spaces across the country.
The residential segment saw a notable increase in investments to $1.6 billion, up 36% from the previous year. This growth underscores the sector's resilience and the increasing confidence of investors in the residential market.
Mixed-use, retail, and alternative assets also attracted significant attention, cumulatively totaling about $1.5 billion and accounting for nearly 17% of the total investments in 2025. These sectors are expected to continue gaining traction as investors diversify their portfolios.
“The year 2025 also saw the listing of the fourth office-focused real estate investment trust (REIT) and notable acquisitions by older REITs, characterized by superior tenant quality, higher occupancy levels, and strong rental growth. With over 370 million square feet of existing office stock having the potential to be included in future REITs, we anticipate a greater degree of institutionalization and consolidation supported by cross-border capital flows over the next few years,” said Vimal Nadar, National Director and Head of Research at Colliers India.
City-wise, Bengaluru and Mumbai together accounted for nearly half of the real estate investments in 2025, with inflows of around $2.2 billion and $1.8 billion, respectively. Of the total $4.0 billion invested in these cities, office assets drove close to three-fourths of the investment activity.
