India's real estate attracts record $8 bn institutional investments

India’s real estate sector recorded its highest-ever institutional investments in 2025, attracting $8.1 billion, driven by strong demand for commercial assets and a growing focus on sustainable development, according to Vestian Research

The investment momentum peaked in the final quarter of the year, with Q4 2025 witnessing a record $3.73 billion in inflows — a 112 per cent increase over the previous quarter. Overall institutional investments in 2025 rose 88 per cent compared to 2023 and were 19 per cent higher than in 2024. Notably, 13 per cent of total quarterly investments were directed towards sustainable real estate projects, highlighting investors’ increasing emphasis on environmentally responsible development

Commercial real estate emerged as the dominant asset class, accounting for 63 per cent of total investments in 2025, up sharply from 35 per cent a year earlier. Investment value in this segment surged 113 per cent year-on-year to nearly $5.1 billion. In Q4 2025 alone, commercial assets attracted $2.3 billion, representing 61 per cent of total inflows, supported by sustained demand from global capability centres (GCCs)

The residential sector maintained a stable share during the last quarter of 2025, while investment value rose sharply by 129 per cent quarter-on-quarter to $438.4 million. Meanwhile, the industrial and warehousing segment witnessed a significant surge, with investments jumping more than sevenfold to $615 million in Q4 2025. This growth was fuelled by strong demand for logistics parks amid rising domestic consumption, increasing the sector’s share of total investments to 17 per cent from 5 per cent in the previous quarter

Foreign capital flows strengthened considerably in the final quarter, with foreign investments rising more than tenfold to $1.5 billion compared to Q3 2025. Over 20 per cent of these foreign inflows were directed towards sustainable real estate projects. Amid global economic uncertainties, co-investments by foreign and domestic players surged 90 per cent quarter-on-quarter to $1.38 billion, while domestic investors continued to display confidence, with cumulative investments in 2025 increasing 18 per cent year-on-year to nearly $2.4 billion

Commenting on the trend, Shrinivas Rao, FRICS, CEO of Vestian, said the record investment inflows underscore sustained investor confidence in India’s long-term economic fundamentals.