Image Source hindustantimes
NEW DELHI – The Indian real estate sector reached a significant turning point in 2025, with institutional investments hitting an all-time high of $8.47 billion. According to a report by property consultancy Colliers India, this represents a 29% year-on-year increase from the $6.56 billion recorded in 2024.
The surge was capped by a record-breaking final quarter (October–December 2025), which alone saw $4.2 billion in capital deployment—the highest ever recorded in a single quarter.
Key Drivers of the 2025 Boom
The record inflows were propelled by a dramatic shift in investor dynamics and a “year-end deal rush” that signaled deep confidence in India’s economic fundamentals.
- Domestic Capital Dominance: For the first time in over a decade, domestic institutional investors emerged as the primary drivers, with inflows more than doubling to $4.8 billion (57% of total volume).
- Office Market Resurgence: The office segment remained the favorite, attracting $4.5 billion—nearly double the levels seen in 2024. This was fueled by strong demand for “Grade A” spaces and the listing of new office-focused REITs.
- Residential Growth: Investment in the residential sector grew by 36% YoY to $1.6 billion, as developers expanded into Tier II and Tier III cities through joint-venture platforms.
Geographic Hotspots
Bengaluru and Mumbai continued to be the “engines” of Indian real estate, together attracting nearly half (47%) of the total national investment.
| Bengaluru – Investment Inflow (2025) – $2.2 Billion | Primary Sector – Office Assets |
| *Mumbai – Investment Inflow (2025) – $1.8 Billion | Primary Sector – Office & Luxury Residential |
| *Multi-City Deals – Investment Inflow (2025)- $2.3 Billion | Primary Sector – Residential & Logistics |
Emerging Trends and Alternatives
While traditional sectors led the way, institutional appetite for alternative assets grew as investors sought portfolio diversification. Mixed-use projects, retail, and “new-age” assets like data centers, student housing, and co-living spaces collectively drew approximately $1.5 billion.
“The strong growth in domestic participation underscores rising confidence among Indian institutional investors, supported by improving asset quality, stable returns, and greater market transparency.”
— Badal Yagnik, CEO and MD, Colliers India.
Outlook for 2026
Experts anticipate that the momentum will carry into 2026. The market is expected to enter a phase of deeper institutionalization and consolidation, with over 370 million sq ft of existing office stock identified as having the potential for inclusion in future REITs
