The office segment remained the dominant asset class, attracting $0.4 billion in institutional investments in the quarter, led by Hyderabad, the report from real estate services provider Colliers said. Other asset classes that garnered significant investors interest were industrial & warehousing and residential segments, which garnered $0.3 billion each.
However, despite leading in total investments, the office segment posted a 23% decline YoY, reflecting a shift in investor interest toward industrial, residential and mixed-use assets.
“Indian real estate continues to present strong opportunities for institutional investors, with core assets driving inflows across key markets. The sustained momentum in residential, industrial, and mixed-use assets signals a diversified investment strategy among both domestic and foreign players,” said Colliers India chief executive Badal Yagnik. “With anticipated monetary policy easing and supportive government policies, we expect capital deployment to remain robust throughout 2025,” Yagnik added.
Major deals in the past quarter included Mindspace REIT’s $235.2 million investment in Sustain Properties (part of K Raheja Corp) in Hyderabad and CapitaLand India Trust’s $116 million investment in Maia Estates in Bengaluru. Blackstone’s $134 million investment in Kolte Patil Developers and the Mitsubishi Estate-Birla Estates JV’s $65 million investment in Bengaluru were among other key deals. The industrial segment saw large deals like Welspun One-WOLP Fund 2’s $229.4 million investment across multiple cities and EcoBox Industrial Parks’ $48.3 million investment in Chennai.
Institutional investments in the residential sector increased nearly threefold y-o-y, accounting for 23% of total inflows. Investments in alternative real estate assets—which include data centres, life sciences, senior housing, and student housing—remained strong at $71 million.“The return of equity capital to the Indian real estate market signals renewed investor confidence, but debt financing will continue to dominate as sales slow due to rising prices. With home affordability stretched, builders will increasingly turn to institutional investors, private equity and structured debt to fuel growth,” said Amit Bhagat, chief executive and managing director of ASK Property Fund.According to Colliers, multi-city deals dominated with a 31% share. Mumbai attracted the highest individual inflows of $289.1 million, up nearly nine-and-a-half times, representing 22% of total investments. Bengaluru followed closely with a 20% share, while Hyderabad also remained a key investment hub, securing 18%. Delhi-NCR recorded a 145% y-o-y increase in investments, reaching $71.5 million, while Chennai witnessed a 60% decline at $48.3 million.
Experts believe that the outlook for institutional investments in Indian real estate remains positive, helped by economic stability, business expansion and policy reforms.