Record $8.5 Billion Institutional Investments in Indian Real Estate in 2025

In 2025, institutional investments in Indian real estate hit an all-time high of $8.5 billion, marking a 29 per cent year-on-year (YoY) growth. This surge was largely driven by a record capital deployment of $4.2 billion in the fourth quarter of 2025, according to a report by Colliers India.

This new peak arrives at a time when the global economy is showing signs of improvement, with trade normalcy returning even amid ongoing tariff negotiations. India’s growing economic prospects and expanding investment horizons have further cemented its status as a major destination for global capital, including in the real estate sector.

Domestic institutional capital emerged as the primary driver of real estate investments in 2025, with inflows more than doubling year-on-year to $4.8 billion, accounting for 57 per cent of the total investment volume. This strong growth in domestic investor participation reflects rising confidence among Indian institutional investors, supported by improving asset quality, stable returns, and greater market transparency.

However, foreign capital deployment in 2025 saw a 16 per cent year-on-year decline to $3.7 billion. Despite this, cross-border investments showed signs of recovery in the final quarter, indicating a gradual improvement in global investor sentiment.

Office assets continued to attract the bulk of the investments, accounting for 54 per cent of the annual inflows, with $4.5 billion invested in 2025. The final quarter alone accounted for nearly two-thirds of the annual capital deployment, coinciding with strong grade A space uptake across major office markets in the country.

The residential segment followed closely with $1.6 billion of inflows during 2025, a 36 per cent year-on-year growth, and accounting for an 18 per cent share in total investments. Mixed-use, retail, and alternative assets also saw significant traction, cumulatively totaling about $1.5 billion and making up nearly 17 per cent of total investments in 2025.

The year also marked 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 sq ft of existing office stock having the potential to be included in future Reits, the trend of institutionalization and consolidation is expected to continue, supported by cross-border capital flows over the next few years.

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 inflows in these cities, office assets drove close to three-fourths of the investment activity. This trend underscores the continued attractiveness of these cities for real estate investments, driven by their robust economic growth and favorable business environments.

Overall, the record-high institutional investments in Indian real estate in 2025 reflect the sector’s resilience and the growing confidence of both domestic and international investors in India’s real estate market. As the global economy continues to stabilize and India’s economic fundamentals remain strong, the outlook for the sector remains positive, with expectations of further growth and institutionalization in the coming years.