India's real estate sector is set to achieve a historic milestone in 2025, with institutional investments projected to reach $10.4 billion, the highest level ever recorded. This marks a 17% increase over the previous year's strong performance of $8.9 billion, underlining sustained investor confidence in the country's property market.

The projected inflows are expected to be spread across 77 transactions, making 2025 the second consecutive year of record-breaking institutional investment activity. This sustained momentum highlights India's growing prominence as one of the most attractive real estate investment destinations in the Asia-Pacific region.

The continued rise in institutional capital reflects the resilience and maturity of India's real estate sector. Improved transparency, stronger asset quality, stable occupier demand, and evolving investment structures have collectively enhanced India's appeal among long-term investors.

Two back-to-back years of record inflows indicate that India's real estate market is transitioning into a more stable and scalable investment ecosystem, capable of supporting long-term capital deployment across multiple asset classes.

Beyond direct transaction volumes, platform commitments worth $11.43 billion were recorded in 2025, with capital earmarked for phased deployment over the next three to seven years. These commitments reflect long-term strategic confidence rather than short-term opportunistic investment.

A significant portion of this pipeline, amounting to $11 billion, is linked to a large data centre platform formed through a strategic joint venture involving domestic and global partners. The remaining commitments are directed toward upcoming commercial and residential development projects across major Indian markets.

• A key structural shift in 2025 has been the rise of domestic institutional investors, who accounted for 52% of total institutional investments. This marks the first time since 2014 that domestic capital has led the market, reversing a decade-long period dominated by foreign institutional participation.

• This transformation has been driven primarily by Indian REITs and Infrastructure Investment Trusts, which together deployed $2.5 billion, accounting for 56% of core asset acquisitions. Indian private equity investors also played a significant role, contributing 30% of total domestic capital deployment.

• The shift reflects the growing maturity of India's institutional investment ecosystem and rising confidence in structured, income-generating real estate vehicles.

• Despite a lower percentage share, foreign institutional investment increased by 18% year-on-year in absolute terms, signalling continued confidence in India's real estate fundamentals.

• Investors from the Americas showed particularly strong momentum, with investments rising from $1.6 billion in 2024 to $2.6 billion in 2025, representing a 63% year-on-year increase. This growth underscores sustained global interest in India's long-term real estate growth story.

Institutional capital deployment in 2025 remained heavily equity-driven, with 83% of total investments structured as equity. This preference reflects a maturing investment approach focused on long-term value creation rather than leveraged returns.

Investors are increasingly prioritising stabilised, income-generating assets that offer predictable cash flows and lower risk profiles, reinforcing the sector's institutional appeal.

From a geographic perspective, Bengaluru emerged as the leading destination, accounting for 29% of total institutional investments in 2025. The city's dominance is supported by its strong technology ecosystem, deep talent pool, and robust commercial real estate fundamentals.

The Mumbai Metropolitan Region continued to attract substantial institutional interest, driven by its concentration of premium office assets and corporate headquarters. Meanwhile, Tier 2 cities attracted $175 million, representing 2% of total investments, signalling early institutional interest in emerging markets for diversification.

Office real estate reclaimed its position as the primary magnet for institutional capital, attracting $6 billion in investments, more than doubling from the previous year. Nearly two-thirds of these investments were directed toward prime core office assets, highlighting investor preference for stabilised properties in established business districts.

At the same time, the residential sector witnessed a strategic recalibration, with increased equity-led partnerships between global investors and domestic developers, reflecting growing confidence in India's housing market fundamentals.

With institutional investments projected to reach a record $10.4 billion in 2025, India's real estate sector is entering a transformative phase. The 17% year-on-year growth, rising domestic participation, sustained foreign confidence, and dominance of equity-led strategies highlight the market's growing maturity.

As capital continues to flow into high-quality, income-generating assets across key cities, India is firmly establishing itself as a globally competitive and institutionally driven real estate investment destination with strong long-term growth potential.