Institutional investments in Indian real estate hit record $8.5 billion in 2025

Mumbai: Institutional investments in the Indian real estate sector reached a record $8.5 billion in 2025, a 29 per cent year‑on‑year rise, a report said on Tuesday.

The report from Colliers India said that domestic institutional capital more than doubled to $4.8 billion, driving 57 per cent of total inflows, while foreign capital moderated 16 per cent to $3.7 billion.

Cross-border investments showed signs of recovery in the final quarter, indicating a gradual improvement in global investor sentiment, the report added. Quarterly inflows peaked in Q4 2025 at $4.2 billion, the highest ever for a single quarter, the report said.

The all-time high institutional investments in India comes at a time when the global economy is holding up better, with signs of trade normalcy even in the wake of ongoing tariff negotiations, it added.

“Alongside this surge, the year also marked the listing of fourth office-focused REIT and notable acquisitions by older REITs, marked by superior tenant quality, higher occupancy levels, and strong rental growth,” said Vimal Nadar, National Director and Head of Research, Colliers India.

Nadar forecasted greater degree of institutionalisation and consolidation supported by cross-border capital flows over the course of next few years with over 370 million sq ft of existing office potentially included in future REITs.

The office sector dominated, drawing $4.5 billion or 54 per cent of annual investments, nearly double 2024 levels, supported by rising participation from both domestic and foreign investors.

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.

Bengaluru & Mumbai cumulatively accounted for about half of the real estate inflows in 2025 and attracted about $4 billion, with office assets driving close to three‑fourths of activity in those cities.

Interestingly, five out of seven major Indian cities saw a year-on-year rise in capital inflows in 2025.

IANS