India’s real estate sector is poised to achieve a historic milestone in 2025, with institutional investments estimated to reach a record USD 10.4 billion across 77 transactions, according to JLL. This marks a 17% year-on-year growth over 2024 and the second consecutive year of record-breaking inflows, underscoring the sector’s growing resilience and appeal to long-term capital.

The sustained momentum demonstrates the resilience and attractiveness of India’s real estate market to institutional investors. This consecutive record-setting performance positions India’s real estate market as one of the most dynamic and rapidly evolving investment landscapes in the Asia-Pacific region, signalling robust opportunities for continued institutional participation and market expansion.

Beyond immediate transactions, 2025 witnessed significant platform commitments totalling USD 11.43 billion, designed for gradual deployment over the next 3-7 years. Majority of the commitment amount—USD 11 billion—stems from a single platform deal established by Digital Connexion, a strategic joint venture comprising Reliance Industries Ltd., Brookfield Asset Management Ltd. and Digital Realty Trust Inc for data centres. The remaining commitments are allocated toward upcoming commercial and residential development projects.

“Institutional investment in real estate is poised to drive exceptional performance in 2025, with an estimated USD 10.4 billion in capital deployed across 77 transactions—a historic achievement that builds on our record-breaking momentum from 2024. What makes this milestone particularly significant is the fundamental transformation we are witnessing in our capital markets ecosystem. For the first time since 2014, domestic institutional investors have captured a commanding 52% market share. Also, the two-fold increase in core asset acquisitions in 2025 demonstrates that investors are not just betting on India’s growth story, but are actively building long-term wealth through our stabilized, income-generating properties. This convergence of domestic institutional strength and sustained foreign confidence creates an unprecedented foundation for continued market expansion” said Lata Pillai, Senior Managing Director & Head of Capital Markets, India, JLL.

Domestic Capital Leads Historic Transformation in India’s Real Estate Investment Market

The investment landscape underwent a pivotal shift in 2025, with domestic institutional investors capturing a commanding 52% market share—the first-time domestic capital has led since 2014. This marks a significant reversal from the 2015-2024 period when foreign institutional investors dominated, and contrasts with the post-GFC era (2010-2014) when opportunistic domestic funds initially drove market activity. Indian REITs and Infrastructure Investment Trusts (InvITs) have emerged as the primary catalysts behind this transformation, deploying USD 2.5 billion—representing 56% of core asset acquisitions. Indian private equity players have contributed additional momentum, accounting for 30% of total domestic capital deployment. This trend reflects the maturation of India’s REIT market and growing institutional comfort with sophisticated real estate investment vehicles.

Sustained Foreign Investment Confidence Despite Shifting Dynamics

While foreign institutional investment declined as a percentage of total activity, absolute foreign capital deployment increased 18% year-over-year, demonstrating continued confidence in Indian real estate fundamentals. Americas-based investors showed particularly robust commitment, increasing their investment from USD 1.6 billion in 2024 to USD 2.6 billion in 2025—a substantial 63% year-over-year growth.

Equity investments continue to dominate institutional capital deployment strategies, commanding 83% of total investment volume. This overwhelming preference for equity structures reflects mature institutional investment approaches focused on long-term wealth creation rather than leveraged return enhancement, positioning investors to capitalize on India’s real estate growth trajectory while maintaining conservative risk profiles.

India’s institutional real estate investment market demonstrates sophisticated capital allocation strategies, with equity investments commanding a substantial 83% share of total investment volume. This overwhelming preference for equity structures reflects mature institutional investment approaches focused on long-term wealth creation rather than leveraged return enhancement, positioning investors to capitalize on India’s real estate growth trajectory while maintaining conservative risk profiles.

The office sector has reasserted its dominance in institutional investments, capturing a commanding 58% market share in 2025. This represents a significant recovery from 2024, when the residential sector led with 45% share, followed by office at 28%. As the market matures, investment horizons are expanding beyond traditional sectors, with emerging asset classes including data centers, student housing, life sciences, and healthcare gaining traction, reflecting investors’ appetite for diversification and alignment with evolving market dynamics.

Bengaluru emerges as dominant investment destination. The institutional investment landscape demonstrates clear geographic preferences, with Bengaluru capturing 29% of total institutional deployment in 2025. This leadership position reflects the city’s status as India’s technology capital and its robust commercial real estate fundamentals. Mumbai-MMR, the financial capital, maintains strong institutional appeal, driven by corporate headquarters concentration and premium commercial assets. Notably, Tier 2 cities received USD 175 million in deployment, representing 2% of total investments. While modest, this signals institutional willingness to explore emerging markets for value-add opportunities and portfolio diversification, indicating the broadening scope of India’s institutional real estate investment landscape.

“2025 marked a pivotal transformation in India’s real estate investment landscape, with office properties reclaiming their position as the institutional capital magnet, attracting USD 6 billion through strategic investments that more than doubled from the previous year. Notably, two-thirds of these investments were concentrated in prime core office properties, demonstrating institutional preference for stabilized, income-generating assets in established commercial markets. Simultaneously, we observed a strategic recalibration in the residential sector, where international confidence was reinforced by a major global investor’s strategic partnership with a leading domestic developer, signalling a maturation toward equity-centric investment approaches across both sectors. This shift reflects institutional investors’ growing confidence in India’s commercial real estate fundamentals and marks the emergence of a more sophisticated, equity-driven investment ecosystem.” said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

As the real estate market matures, investment horizons are expanding beyond traditional sectors. Emerging asset classes such as, data centers, student housing, life sciences and healthcare are gaining traction, reflecting investors’ appetite for diversification and alignment with evolving market dynamics. The largest platform commitment of 2025 was established through a USD 11.3 bn joint venture comprising Mukesh Ambani’s Reliance Industries Ltd., Brookfield Asset Management Ltd., and Digital Realty Trust Inc for data centres., highlighting the significant investment activity in the digital infrastructure sector.

Looking ahead to 2026, the Indian real estate market is poised for further growth and diversification

The consecutive record-breaking performance over 2024-2025 demonstrates the market’s capacity to maintain upward momentum while evolving structurally. This trajectory positions India as a premier destination for institutional capital in the Asia-Pacific region.

The fundamental shift toward domestic capital leadership, signals a permanent transformation rather than a cyclical trend. The maturation from opportunistic post-GFC strategies to sophisticated, long-term wealth creation approaches through REITs and InvITs indicates that India’s real estate capital markets have reached institutional-grade sophistication. This evolution is expected to accelerate as the REIT ecosystem expands and institutional investors develop greater familiarity with real estate investment vehicles. The sustained foreign interest, combined with domestic capital leadership, creates a balanced and resilient investment ecosystem.

India’s institutional real estate investment market is positioned for continued expansion, supported by economic resilience, market transparency improvements, and sophisticated capital allocation strategies. The foundation established in 2024-2025 creates a platform for India to emerge as one of the world’s most attractive institutional real estate investment markets over the next investment cycle. The institutional investment outlook in the Indian real estate sector has displayed encouraging trends in recent years and is anticipated to maintain its strength in the foreseeable future.