Institutional investment in India's office real estate segment staged a robust comeback in 2025, signaling renewed confidence amidst a nuanced global economic backdrop. After a subdued first half, office asset investments jumped 27% year-on-year in Q3 alone to reach $0.8 billion, accounting for over 60% of total quarterly inflows, according to Colliers India.
This resurgence has been a key factor in steering the overall institutional real estate investments in India to $4.3 billion during the first nine months of 2025, despite a 9% dip compared to the previous year.
The renewed appetite for office assets has been fueled by strong demand for Grade A commercial spaces, particularly in major Tier I cities like Chennai and Pune. The ongoing institutionalisation of the office segment is driving investor interest across established metropolitan markets and expanding to new geographies.
Office assets dominated 35% of the total investment inflows for the year so far, almost matching the levels seen in 2024, with domestic investors playing a pivotal role. Domestic capital surged 52% year-on-year to USD 2.2 billion, surpassing foreign investments, which contracted 36% to $2.1 billion. This marks a significant structural shift; in 2021, foreign capital comprised 84% of real estate investments in India.
Badal Yagnik, CEO of Colliers India, highlighted the transformation: “Institutional investments in Indian real estate reached $1.3 billion in Q3 2025, an 11% increase year-on-year. Domestic capital contributed 60% of quarterly inflows, with strong backing from both the office and residential sectors. This trend reflects the growing depth and confidence of domestic funds and REITs in the market.”
Residential real estate also demonstrated positive momentum, with investments rising 11% year-on-year to $1.1 billion, supported by both domestic and foreign institutional interest. Alongside office and residential, alternative asset classes such as mixed-use developments, retail, and industrial segments recorded notable gains, collectively accounting for nearly a third of total inflows.
Sharad Mittal, Founder and CEO of Arnya RealEstates Fund Advisors, said the residential real estate market continues to demonstrate strong end-user demand, improved affordability, and sustained investor confidence. “We see compelling opportunities in greenfield projects across cities; Mumbai redevelopment market is attractive. Over the next 12–18 months, we intend to deploy over Rs 2,000 crore across the capital stack spanning structured debt and equity towards high-quality residential projects. Our focus remains on partnering with reputed developers and backing mid-segment residential projects across cities,” he said.
Key investment hubs Mumbai and Bengaluru accounted for roughly one-third of total real estate investments, attracting $0.8 billion (19%) and $0.5 billion (12%) respectively during the first nine months of the year. Pune saw an extraordinary surge, particularly in office investments, which grew over 25-fold in Q3 alone compared to the previous year. “Emerging cities like Hyderabad, Kolkata, Chennai, and Delhi NCR continued to attract steady institutional interest, spreading real estate investment more evenly across multiple locations,” said Ambar Maheshwari, CEO of Sammaan Asset Management, a 100% subsidiary of Sammaan Capital (earlier known as Indiabulls Housing).
The growing prominence of domestic institutional investors was further echoed by the launch of several new domestic real estate funds in 2025, broadening the investment base and enhancing market liquidity. These funds have aggressively targeted office spaces and residential projects, confirming a bullish outlook for the sector. Deals led by prominent domestic players and REITs have underscored the increasing role of local capital in shaping India’s real estate landscape.
The office segment’s revival is supported by robust leasing momentum and strong occupier demand, particularly from sectors like technology, BFSI, and global capability centres, which have adhered to office-first mandates. According to industry reports, India’s office leasing absorption hit record highs in Q2 2025 and continued to maintain positive trends, reinforcing investor confidence in commercial real estate's fundamentals.
Looking ahead, domestic institutional investors and REITs are expected to remain steady capital sources, while foreign investors are likely to adopt a cautious stance amid ongoing global economic uncertainties. Experts say the balanced mix of domestic and foreign capital, combined with a geographically diversified investment pattern, positions Indian real estate for sustained growth.
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This resurgence has been a key factor in steering the overall institutional real estate investments in India to $4.3 billion during the first nine months of 2025, despite a 9% dip compared to the previous year.
The renewed appetite for office assets has been fueled by strong demand for Grade A commercial spaces, particularly in major Tier I cities like Chennai and Pune. The ongoing institutionalisation of the office segment is driving investor interest across established metropolitan markets and expanding to new geographies.
Office assets dominated 35% of the total investment inflows for the year so far, almost matching the levels seen in 2024, with domestic investors playing a pivotal role. Domestic capital surged 52% year-on-year to USD 2.2 billion, surpassing foreign investments, which contracted 36% to $2.1 billion. This marks a significant structural shift; in 2021, foreign capital comprised 84% of real estate investments in India.
Badal Yagnik, CEO of Colliers India, highlighted the transformation: “Institutional investments in Indian real estate reached $1.3 billion in Q3 2025, an 11% increase year-on-year. Domestic capital contributed 60% of quarterly inflows, with strong backing from both the office and residential sectors. This trend reflects the growing depth and confidence of domestic funds and REITs in the market.”
Residential real estate also demonstrated positive momentum, with investments rising 11% year-on-year to $1.1 billion, supported by both domestic and foreign institutional interest. Alongside office and residential, alternative asset classes such as mixed-use developments, retail, and industrial segments recorded notable gains, collectively accounting for nearly a third of total inflows.
Sharad Mittal, Founder and CEO of Arnya RealEstates Fund Advisors, said the residential real estate market continues to demonstrate strong end-user demand, improved affordability, and sustained investor confidence. “We see compelling opportunities in greenfield projects across cities; Mumbai redevelopment market is attractive. Over the next 12–18 months, we intend to deploy over Rs 2,000 crore across the capital stack spanning structured debt and equity towards high-quality residential projects. Our focus remains on partnering with reputed developers and backing mid-segment residential projects across cities,” he said.
Key investment hubs Mumbai and Bengaluru accounted for roughly one-third of total real estate investments, attracting $0.8 billion (19%) and $0.5 billion (12%) respectively during the first nine months of the year. Pune saw an extraordinary surge, particularly in office investments, which grew over 25-fold in Q3 alone compared to the previous year. “Emerging cities like Hyderabad, Kolkata, Chennai, and Delhi NCR continued to attract steady institutional interest, spreading real estate investment more evenly across multiple locations,” said Ambar Maheshwari, CEO of Sammaan Asset Management, a 100% subsidiary of Sammaan Capital (earlier known as Indiabulls Housing).
The growing prominence of domestic institutional investors was further echoed by the launch of several new domestic real estate funds in 2025, broadening the investment base and enhancing market liquidity. These funds have aggressively targeted office spaces and residential projects, confirming a bullish outlook for the sector. Deals led by prominent domestic players and REITs have underscored the increasing role of local capital in shaping India’s real estate landscape.
The office segment’s revival is supported by robust leasing momentum and strong occupier demand, particularly from sectors like technology, BFSI, and global capability centres, which have adhered to office-first mandates. According to industry reports, India’s office leasing absorption hit record highs in Q2 2025 and continued to maintain positive trends, reinforcing investor confidence in commercial real estate's fundamentals.
Looking ahead, domestic institutional investors and REITs are expected to remain steady capital sources, while foreign investors are likely to adopt a cautious stance amid ongoing global economic uncertainties. Experts say the balanced mix of domestic and foreign capital, combined with a geographically diversified investment pattern, positions Indian real estate for sustained growth.
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