MUMBAI: An year-end surge has pushed institutional investments into the domestic real estate sector to an all-time high of $8.5 billion in 2025, marking a 29% on-year growth while domestic inflows stood at $4.8 billion. This new peak of $8.5 billion inflows, up 29% over 2024, comes at a time when the global economy is holding up better, with signs of trade normalcy amidst the ongoing tariff wars.
Additionally, the country’s growth prospects and expanding investment horizons continue to reinforce its growing stature as a major destination for global capital across economic sectors including real estate, realty consultancy Colliers India said in a note Tuesday.
Meanwhile, the report also said domestic investment inflows also surged over 2x times at $4.8 billion, driving 57% of the total inflows in 2025. On the other hand, investments into office assets doubled to $4.5 billion, accounting for over half of the total inflows. Bengaluru and Mumbai got about half of the real estate inflows in 2025.From a quarterly perspective, capital inflows peaked in Q4 of 2025 to $4.2 billion, more than two times the jump for the full year, the report added.
Domestic institutional capital emerged as the primary driver of real estate investments in the year gone-by, with inflows more than doubling to $4.8 billion, accounting for 57% of the total investment volume during the year.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 on-year, cross-border investments showed signs of recovery in the final quarter, indicating a gradual improvement in global investor sentiment, said Badal Yagnik, chief executive & managing director at Colliers India.
“Private equity investments reached a new high in 2025, totalling $8.5 billion, supported by record capital deployment in the last quarter which alone saw $4.2 billion of inflows, which is the highest ever in any quarter, indicating prospective tailwinds. “During the year, office assets continued to attract bulk of the investments, accounting for 54% of the annual inflows, followed by residential and industrial & warehousing assets.“
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,” he said Yagnik.
Institutional inflows include investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs, listed Reits and sovereign wealth funds. Office segment dominated with 54% share in investments during 2025, followed by residential assets. The office market saw record investments, attracting $4.5 billion in 2025 constituting as much as 54% of the total, which is also almost twice of 2024, he said.
Notably, 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% on-year growth and accounting for 18% of total investments.
Capital deployment in the segment continues to be supported by strong long-term demand fundamentals, including favourable demographics, rising income levels, and increased developer expansion into tier II cities through joint-venture platforms, attracting both domestic and foreign investors. Meanwhile, mixed-use, retail, and alternative assets too saw significant traction, cumulatively totalling to 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, second homes, etc.“The office market has scaled new highs in 2025, attracting a record $4.5 billion in institutional investments. Interestingly, alongside this surge, the year also marked the listing of fourth office-focused Reits and notable acquisitions by older Reits, marked by superior tenant quality, higher occupancy levels, and strong rental growth.
Investment traction is supported by strong operational performance and consecutive record-breaking grade A space uptake in the last three to four years. Looking ahead, with over 370 million sqft., of existing office stock having a potential to be included in future Reits, we anticipate greater degree of institutionalisation and consolidation supported by cross-border capital flows over the course of next few years,” said Vimal Nadar, national director at the agency.
Bengaluru and Mumbai together drove nearly half of real estate investments in the year, 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. Interestingly, five out of seven major cities saw 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.