NEW DELHI: Institutional investments in the Indian real estate sector are estimated to cross the $10 billion mark for the first time by 2025, reaching around $10.4 billion through 77 transactions, according to a JLL report. This represents a 17% year-on-year increase from the $8.9 billion recorded in 2024, marking the second year in a row of record investment inflows.In addition to closed transactions, the sector also witnessed platform commitments of approximately $11.4 billion by 2025, earmarked for deployment over the next three to seven years, largely for commercial assets, data centers and residential construction.
A major structural shift in 2025 was the rise of domestic institutional capital, which represented 52% of total real estate investment, the first time since 2014 that domestic investors have led the market. Indian REITs and Infrastructure Investment Trusts (InvITs) emerged as key drivers, deploying approximately $2.5 billion and accounting for more than half of core asset acquisitions. Indian private equity players contributed almost 30% of domestic capital deployment.While the share of foreign investors fell relatively, absolute foreign capital inflows increased by 18% year-on-year. Investors from America have significantly increased their investments, from $1.6 billion in 2024 to $2.6 billion in 2025.
Equity investments dominated institutional activity, accounting for 83% of total capital deployed during the year.
The office sector regained its position as the largest recipient of institutional capital, accounting for 58% of total investments in 2025, compared to 28% in the previous year. This was a reversal from 2024, when residential investment had led institutional investment flows. Much of the office investment was concentrated in core assets with stable cash flows.
Bengaluru emerged as the top investment destination, attracting 29% of the total institutional capital deployed during the year, followed by the Mumbai Metropolitan Region. Tier II cities accounted for approximately $175 million, or 2% of total investments, indicating early institutional interest outside the top markets.
Investor interest is also expanding into emerging asset classes such as data centers, student housing, life sciences and healthcare. The largest platform commitment during the year was a data center joint venture involving Reliance Industries, Brookfield Asset Management and Digital Realty Trust, with commitments of more than $11 billion.
According to JLL, this trend is expected to continue into 2026, supported by economic resilience, expansion of REIT participation and deeper institutional involvement across asset classes.
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