Record $8.5 Billion Real Estate Investments in 2025: Bengaluru and Mumbai Lead the Surge

In 2025, institutional investments in India's real estate sector reached an all-time high of $8.5 billion, marking a 29% year-on-year growth. This significant increase comes at a time when the global economy is showing signs of improvement, with trade normalcy amidst ongoing tariff wars. Colliers India, a leading real estate consultancy, highlighted the country’s growing stature as a major destination for global capital in its recent report.

Domestic investment inflows surged more than twofold to $4.8 billion, accounting for 57% of the total inflows in 2025. Investments into office assets doubled to $4.5 billion, making up over half of the total inflows. Bengaluru and Mumbai together attracted about half of the real estate investments in 2025, with inflows of around $2.2 billion and $1.8 billion, respectively.

From a quarterly perspective, capital inflows peaked in the fourth quarter of 2025, reaching $4.2 billion, more than double the full-year increase. This surge in the final quarter indicates strong investor confidence and a promising outlook for the sector.

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

While foreign capital deployment moderated 16% to $3.7 billion year-on-year, cross-border investments showed signs of recovery in the final quarter, indicating a gradual improvement in global investor sentiment. Badal Yagnik, Chief Executive & Managing Director at Colliers India, noted that private equity investments reached a new high in 2025, totaling $8.5 billion, with the fourth quarter alone seeing $4.2 billion of inflows, the highest ever in any quarter.

Office assets continued to attract the bulk of investments, accounting for 54% of the annual inflows, followed by residential and industrial & warehousing assets. The office market saw record investments, attracting $4.5 billion in 2025, constituting 54% of the total, almost double the amount from 2024. The final quarter alone accounted for nearly two-thirds of annual capital deployment and coincided with strong grade A space uptake across the country's major office markets.

The residential segment followed the office segment with $1.6 billion in 2025, registering a 36% year-on-year growth and accounting for 18% of total investments. Capital deployment in this segment continues to be supported by strong long-term demand fundamentals, including favorable demographics, rising income levels, and increased developer expansion into tier II cities through joint-venture platforms, attracting both domestic and foreign investors.

Mixed-use, retail, and alternative assets also saw significant traction, cumulatively totaling about $1.5 billion and accounting for nearly 17% of the total. Investor appetite in these segments continues to be driven by portfolio diversification and growing focus on assets powered by end-user demand, such as data centers, co-living, and second homes.

Bengaluru and Mumbai together drove nearly half of real estate investments in 2025, with inflows of around $2.2 billion and $1.8 billion, respectively. Of the total $4 billion inflows in these cities, office assets drove close to three-fourths of the investments. Five out of the seven major cities saw a year-on-year rise in capital inflows in 2025. Meanwhile, of the $2.3 billion multi-city investments, over 40% are in residential assets, reflecting growing investor interest in early-stage residential projects and expansion in newer residential markets, including emerging small towns.

Looking ahead, institutional investments are expected to strengthen further, supported by expanding domestic capital, improving global risk appetite, and the strong economic fundamentals of the country. Core income-generating assets, particularly offices, industrial & logistic parks, and residential segments, will remain priority areas for investors in 2026. The office market has scaled new highs in 2025, attracting a record $4.5 billion in institutional investments. With over 370 million sq ft of existing office stock having the potential to be included in future REITs, we anticipate greater institutionalization and consolidation supported by cross-border capital flows over the next few years, according to Vimal Nadar, National Director at Colliers India.