The report highlights India as the clear leader in the region, accounting for 68% of total office leasing activity across Asia Pacific during the year. Strong demand from occupiers, expansion of global capability centres (GCCs), and steady economic growth have positioned India as the dominant office market in the region.

India, China and Japan Drive APAC Office Demand

According to the Colliers Asia Pacific Office Market Insights – February 2026 report, the majority of office demand in the region came from India, Mainland China, and Japan, which together accounted for over 90% of total leasing activity in 2025.

While the largest economies dominated overall demand, several smaller markets also saw significant growth. Markets such as the Philippines, New Zealand, and Hong Kong recorded multi-fold increases in leasing activity, driven by improving business sentiment and renewed corporate expansion.

Office Supply Also Rises Across Key Markets

The report noted that new office supply across the top 11 Asia Pacific markets increased 19% year-on-year, reaching 9.6 million square metres (103.3 million sq ft) in 2025.

Most of the supply growth was concentrated in India, Mainland China, and Singapore, which together contributed 82% of the total new office completions during the year.

Overall, eight of the eleven major markets recorded an increase in new office supply, indicating strong developer confidence in the region’s commercial real estate sector.

India Accounts for 68% of Leasing and 55% of New Supply

India emerged as the largest driver of office market growth in Asia Pacific, accounting for:

• 68% of total leasing activity across the region
• 55% of the new office supply delivered in 2025

According to Vimal Nadar, National Director and Head of Research at Colliers India, the country’s strong fundamentals continue to attract both occupiers and investors.

“India continues to drive the APAC office market, firmly establishing itself as a dominant demand centre and key location for investments. Backed by steady economic growth, a strong occupier base and expanding GCCs, India’s office market is well positioned to sustain its growth momentum,” Nadar said.

Institutional Investments Surge 21% in 2025

Investor confidence in the office sector also strengthened significantly during the year.

Institutional investments in Asia Pacific’s office segment rose 21% year-on-year to USD 58.6 billion in 2025, reflecting growing interest from global capital in the region’s commercial real estate market.

India recorded one of the strongest increases in office investments, further reinforcing its position as a preferred destination for long-term institutional capital.

Vacancy Levels Expected to Tighten in 2026

Industry experts expect office demand and supply to remain robust in the first half of 2026, supported by continued corporate expansion and a growing preference for high-quality, future-ready office spaces.

According to Arpit Mehrotra, Managing Director – Office Services at Colliers India, the strong leasing momentum seen in the second half of 2025 is likely to continue.

“Office demand across key APAC markets continues to strengthen despite geopolitical frictions. Supported by domestic growth in major economies, controlled inflation and a more accommodative interest rate environment, the region’s fundamentals remain stronger than many global markets,” Mehrotra said.

He added that as vacancy levels decline in prime locations, rentals across key office markets—including India—are expected to move upward in the coming months.

Companies Becoming More Strategic About Office Space

The report also highlights a structural shift in corporate real estate strategies across Asia Pacific.

According to Mike Davis, Managing Director of Occupier Services for Asia Pacific at Colliers, companies are no longer simply expanding office footprints but are recalibrating their workplace strategies.

Instead of taking larger spaces, organisations are focusing on better-located, higher-quality office environments that support hybrid work models and employee experience.

“Businesses are not simply returning to the office; they are recalibrating their portfolios. We are seeing companies make fewer moves, but better ones,” Davis said.

Outlook: India to Remain APAC’s Office Powerhouse

With strong occupier demand, growing global capability centres, and rising institutional investments, India is expected to remain the dominant office market in Asia Pacific in the coming years.

The continued shift toward premium Grade-A office buildings, sustainable workplaces, and strategic corporate expansions is likely to support healthy leasing volumes and rental growth through 2026.

Also Read: India’s office sector can see leasing of 35-38 mn sq ft during 2023

The post India Dominates Asia Pacific Office Market as Regional Leasing Touches 105 Million sq ft in 2025 appeared first on Square Feat India.

According to Vestian Research, Q4 2025 alone accounted for USD 3.73 billion, the highest quarterly inflow ever recorded in Indian real estate. This marked a 112% jump quarter-on-quarter and underscored renewed investor confidence after a volatile first half of the year.

Significantly, over 20% of foreign investments in Q4 2025 were directed toward sustainable projects, highlighting a decisive shift in capital allocation strategies as global investors increasingly prioritise ESG-aligned assets.

Q4 Surge Powers Record Annual Investments

Institutional investments in 2025 rose 19% over 2024 and 88% compared to 2023, cementing the year as the strongest on record for Indian real estate capital inflows.

After a subdued Q1, investment momentum steadily improved through the year before peaking sharply in Q4, when inflows more than doubled compared to the previous quarter.

The late-year surge reflects renewed deal closures, improved macro visibility, and stronger appetite for income-generating and future-ready assets.

Commercial Assets Dominate on GCC Demand

Commercial real estate emerged as the clear beneficiary of investor interest in 2025. The segment accounted for 63% of total investments, up sharply from 35% a year earlier.

• Commercial investments touched nearly USD 5.1 billion, a 113% YoY increase
• In Q4 alone, commercial assets attracted USD 2.3 billion, making up 61% of quarterly inflows

The strong performance was driven by sustained demand from Global Capability Centres (GCCs), which continue to expand their office footprints across key Indian cities amid long-term cost and talent advantages.

Industrial & Warehousing Sees Sharp Capital Upswing

The industrial and warehousing sector emerged as one of the fastest-growing segments in Q4 2025, reflecting India’s consumption-led growth and logistics expansion.

• Investments surged over seven times QoQ to USD 615 million
• Sector share rose to 17% in Q4, up from 5% in the previous quarter

Rising domestic consumption, e-commerce expansion, and the need for modern logistics infrastructure have significantly boosted investor appetite for large-format warehousing and logistics parks.

Residential Investments Rebound Sequentially

While residential real estate’s share remained relatively stable, the sector saw a sharp 129% quarter-on-quarter rise in investment value, reaching USD 438.4 million in Q4 2025.

This sequential recovery indicates renewed interest in select residential opportunities, particularly in high-quality, well-located projects, even as investors remain selective amid pricing and execution considerations.

Foreign Capital Makes Strong Comeback With Sustainability Focus

Foreign investments rebounded sharply in Q4 2025, rising more than tenfold QoQ to USD 1.5 billion. Despite global uncertainties keeping overseas investors cautious earlier in the year, deal activity accelerated significantly toward year-end.

Notably, over one-fifth of foreign capital deployed in Q4 was earmarked for sustainable real estate development, underscoring the growing importance of green buildings, energy efficiency, and climate-resilient assets in investment decision-making.

Co-Investments Gain Momentum Amid Global Uncertainty

As global investors sought risk-sharing structures, co-investments surged 90% QoQ to USD 1.38 billion in Q4 2025. This trend reflects growing collaboration between foreign and domestic capital to pursue large, diversified real estate opportunities.

Meanwhile, domestic investors continued to demonstrate steady confidence, with cumulative investments in 2025 rising 18% YoY to nearly USD 2.4 billion.

Industry View: Market Becomes More Resilient and Future-Ready

Commenting on the investment surge, Shrinivas Rao, FRICS, CEO, Vestian, said:

“The record USD 8.1 billion in institutional investments recorded in 2025 reinforces sustained investor confidence in India’s long-term economic fundamentals. As capital increasingly aligns with sustainability-led development, sustained GCC-driven occupier demand, and rising domestic participation, Indian real estate continues to evolve into a resilient, diversified, and future-ready investment market.”

Also Read: Indian Real Estate: Riding Higher in 2025

The post Over 20% of Foreign Capital in Q4 Poured Into Sustainable Real Estate as Institutional Investments Hit Record High in 2025 appeared first on Square Feat India.

The final quarter of the year emerged as a game changer, with Q4 2025 alone accounting for USD 4.2 billion, the highest-ever quarterly inflow recorded in the Indian real estate sector.

Domestic Capital Takes the Lead

Domestic institutional investors emerged as the primary growth engine in 2025, with investments more than doubling year-on-year to USD 4.8 billion, accounting for 57% of total inflows.

Foreign investments, while moderating by 16% YoY to USD 3.7 billion, showed clear signs of revival in the last quarter, indicating gradual recovery in global investor sentiment amid improving trade conditions and easing geopolitical uncertainty.

“Private equity investments in Indian real estate reached a new high in 2025, supported by record capital deployment in the last quarter of the year. Office assets continued to dominate, followed by residential and industrial & logistics assets,”
— Badal Yagnik, CEO & Managing Director, Colliers India

Office Assets Dominate Institutional Investments

The office segment remained the top investment destination, attracting USD 4.5 billion in 2025—nearly double the inflows seen in 2024. Office assets alone accounted for 54% of total institutional investments during the year.

Key highlights:

• Q4 2025 contributed nearly two-thirds of annual office investments
• Strong Grade A leasing activity supported investor confidence
• Increased participation from both domestic and foreign capital

The residential segment followed with USD 1.6 billion in inflows, marking a 36% YoY growth and an 18% share in total investments. Long-term demand fundamentals, favourable demographics, and joint-venture led expansion into Tier II cities continued to attract capital.

Asset-wise Institutional Investment Trends (USD million)

*Alternate assets include data centres, life sciences, senior housing, student housing, holiday homes, and schools.
Source: Colliers

Q4 2025: A Record-Breaking Quarter

Quarterly inflows peaked in Q4 2025 at USD 4.2 billion, reflecting a 123% YoY jump and a 231% QoQ rise.

Q4 2025 Asset-wise Snapshot (USD million)

REIT Momentum Strengthens Office Investment Case

The year also witnessed:

• Listing of the fourth office-focused REIT
• Portfolio expansion by existing REITs
• Higher occupancy levels and rental growth

“With over 370 million sq ft of office stock having REIT potential, we expect greater institutionalisation and consolidation in the coming years,”
— Vimal Nadar, National Director & Head of Research, Colliers India

Bengaluru and Mumbai Lead Capital Inflows

Bengaluru and Mumbai together accounted for nearly half of total investments in 2025, largely driven by large office transactions.

City-wise Investment Inflows (USD million)

Source: Colliers

Multi-city investments accounted for USD 2.3 billion, with over 40% directed towards residential projects, highlighting growing investor appetite for early-stage housing developments and emerging markets.

Outlook for 2026

Colliers expects institutional investments to remain robust in 2026, supported by:

• Growing domestic capital pools
• Improving global risk appetite
• Strong economic fundamentals

Priority segments:
Offices
Industrial & logistics parks
Residential housing

Also Read: From Crisis to Opportunity: Stressed Real Estate Projects Emerge as India’s Next Investment Frontier

The post Year-End Investment Surge Pushes Institutional Inflows in Indian Realty to Record USD 8.5 Billion in 2025 appeared first on Square Feat India.

India’s real estate sector maintained steady growth momentum in 2025 despite geopolitical tensions, global macroeconomic uncertainty, and evolving trade dynamics, supported by strong domestic demand, policy reforms, and sustained infrastructure investment.

“Despite widespread uncertainty, India’s real estate sector demonstrated resilience in 2025. Policy reform, infrastructure growth, and rising income supported stable demand across asset classes,” said Shrinivas Rao, FRICS, CEO, Vestian. “Strong office absorption, steady warehousing activity, and renewed investment flows highlight the sector’s long-term growth trajectory and its expanding role in India’s economic development.”

Economic Stability Provides a Strong Foundation

India continued to register steady economic progress in 2025, underpinned by robust domestic consumption, structural reforms, and ongoing investment in large-scale infrastructure. This stability enabled the real estate sector to sustain activity across office, retail, warehousing, and residential segments, even as global markets remained volatile.

Union Budget 2025–26 Strengthens Real Estate and Infrastructure Push

The Union Budget 2025–26 reinforced the government’s long-term Viksit Bharat vision, with total expenditure rising 7.4% to INR 50.65 lakh crore, placing infrastructure and urban development at the core of economic strategy.

Revised income tax slabs enhanced household disposable income, providing support to housing demand. The allocation of INR 15,000 crore to SWAMIH Fund II for completing one lakh stressed housing units improved liquidity in the affordable housing segment.

In addition, the INR 1 lakh crore Urban Challenge Fund is expected to catalyse institutional-grade city development, while the National Geospatial Mission aims to digitise land records and improve planning transparency. A national framework encouraging states to promote Global Capability Centers (GCCs) in Tier II cities is expected to diversify office demand geographically.

Office Market Hits Record Absorption Levels

The office sector emerged as the strongest performing asset class in 2025. Leasing activity in the first nine months rose 15% year-on-year, with every quarter outperforming the corresponding period in 2024. Annual gross absorption is projected to reach a record 75 million sq ft, the highest ever in a calendar year.

GCCs remained the primary demand driver, accounting for 42% of pan-India absorption in 9M 2025. Bengaluru, Hyderabad, Pune, and NCR led activity. The IT–ITeS sector contributed 39%, while flex operators expanded to 12%, reflecting evolving workplace strategies. BFSI demand moderated to 14%.

Bengaluru, NCR, and Pune accounted for nearly two-thirds of new supply, while Bengaluru, NCR, and Mumbai together contributed 85% of total absorption. ESG considerations remained critical, with green-certified assets comprising 82% of total leasing.

Warehousing and Logistics Remain Stable

India’s warehousing and logistics sector recorded 28.1 million sq ft of absorption in 9M 2025, reflecting a modest 9% year-on-year decline amid temporary softening in the first half.

Bhiwandi alone accounted for nearly 25% of national absorption, reinforcing its status as a leading logistics hub. 3PL players led demand with a 35% share, followed by engineering and manufacturing at 19%. After a subdued first half, e-commerce rebounded strongly in Q3, contributing 23% of quarterly demand.

Rental values strengthened across NCR, Bengaluru, Hyderabad, and Mumbai, registering annual growth between 17% and 47%, while Chennai, Pune, and Kolkata witnessed localized corrections.

Government initiatives such as PM Gati Shakti, the Urban Infrastructure Development Fund, and ongoing GST rationalisation continued to support long-term sector fundamentals.

Retail Leasing Gains Momentum Amid Supply Constraints

Retail leasing activity remained robust through 9M 2025 and is expected to surpass 2024 levels. Rising discretionary spending and stable occupier confidence supported demand for quality retail assets.

Fashion and apparel led leasing, followed by F&B and entertainment, reflecting a growing shift toward experience-driven retail formats. However, limited new supply tightened vacancy levels, keeping mall rentals stable and driving marginal appreciation on high streets.

Housing Market Moderates as Prices Impact Affordability

The residential market witnessed moderation in 2025 as rising prices affected affordability. Sales and new launches crossed three lakh units each in 9M 2025, but unsold inventory rose to nearly six lakh units due to softer absorption.

Despite lower volumes, the value of housing sales increased, driven by sustained demand for premium and luxury homes. Developers increasingly focused on amenity-rich, well-located projects, while prices rose across major cities due to higher construction costs and premium segment demand.

The RBI maintained the repo rate at 5.50%, resulting in marginal reductions in mortgage rates and offering limited relief to homebuyers.

Domestic Capital Anchors Institutional Investments

Institutional investments in Indian real estate stood at USD 4.37 billion in 9M 2025, down 5.5% YoY, primarily due to a subdued first quarter. Investment momentum improved in Q2 and Q3, which together accounted for USD 3.55 billion.

Commercial real estate dominated inflows with a 79% share, supported by strong office leasing. Residential assets attracted 11% of total investments. Domestic investors played a critical role in sustaining momentum, while co-investment structures gained traction among foreign investors amid global uncertainty.

Total institutional inflows are expected to cross USD 6 billion by the end of 2025.

Also Read: Home Prices Keep Rising Even as Sales Slow

The post India’s Real Estate Market Shows Resilience in 2025 Despite Global Headwinds appeared first on Square Feat India.

Robust occupier demand, policy support, infrastructure expansion, and rising investor confidence are collectively reinforcing India’s position as a high-potential real estate market in the Asia-Pacific region.

Industrial & Warehousing: Demand Stays Strong, Supply Keeps Pace

India’s industrial and warehousing sector demonstrated remarkable resilience in 2025, with cumulative leasing across the top eight markets touching 26.5 million sq ft in the first nine months, marking an 11% year-on-year increase.

Grade A warehousing demand remained at record levels despite global trade uncertainties. Third-party logistics (3PL) players continued to dominate, accounting for nearly one-third of total leasing activity, while e-commerce and engineering companies sharply increased space absorption.

Industry estimates suggest annual demand could reach 30–40 million sq ft, with new supply also expected to remain elevated at 35–40 million sq ft, indicating a balanced market.

2026 Outlook: Policy Push and Infrastructure to Unlock New Markets

Looking ahead, the industrial and warehousing sector is expected to sustain 30–40 million sq ft of average annual demand, driven by a strong policy-led manufacturing push and expanding logistics networks.

Flagship initiatives such as Make in India, Production-Linked Incentive (PLI) schemes, and the Gati Shakti master plan are expected to catalyze large-format warehouse transactions. Deals of 200,000 sq ft or more are likely to account for 40–50% of Grade A leasing in 2026, particularly across logistics corridors.

Plug-and-Play Parks Gain Momentum

Plug-and-play industrial parks are emerging as a preferred choice for occupiers seeking faster setup and reduced time-to-market. These facilities offer compliance-ready units, core infrastructure, and flexible layouts, allowing businesses to scale operations efficiently. Their adoption is expected to accelerate further in 2026.

Tier II and III Cities Emerge as Logistics Growth Engines

While Tier I cities will continue to command a significant share of demand, Tier II and Tier III markets are poised for stronger traction. Expansion of expressways, dedicated freight corridors, industrial corridors, and Multi-Modal Logistics Parks (MMLPs) is enabling industrial activity to move beyond traditional hubs.

Improved regional connectivity is expected to unlock new logistics clusters and manufacturing zones across the country.

Hyperlocal Warehousing and EV Ecosystem Drive New Demand

The rapid rise of e-commerce, q-commerce, and quick-delivery platforms is reshaping urban supply chains. Demand for micro-fulfilment centres, dark stores, and in-city warehouses is expected to increase as retailers move closer to end consumers.

Simultaneously, growth in electric vehicle (EV) manufacturing and ancillary industries is driving demand for specialized facilities such as battery storage, electronics manufacturing, and component warehouses.

Alternative Assets: Data Centres, Senior Living and Co-Living Expand Footprint

Alternative real estate segments continued to scale in 2025, led by data centres, co-living, and senior living formats.

India’s data centre capacity has crossed 1,300 MW, translating into nearly 16 million sq ft of real estate footprint, more than doubling over the past five years. This growth is being fuelled by cloud adoption, AI, IoT, data localisation norms, and government policy support.

Co-living inventory has reached 0.3 million beds, while senior living stands at 0.03 million beds, indicating early-stage but accelerating adoption.

2026: Alternative Assets Enter Accelerated Growth Phase

Data centre capacity is expected to rise to 2 GW over the next few years, with strong traction in AI-led computing, edge data centres, and 5G-driven infrastructure. Expansion into smaller cities is also anticipated, supported by state-level policies.

Senior living demand is expected to rise in Tier II cities and spiritual hubs, while NRI interest is growing in established urban centres. Co-living is projected to see market consolidation, formalisation, and expansion beyond Tier I cities, with penetration potentially rising to 8–10% in the next two years.

Investments: Institutional Capital Remains Resilient

Institutional investments in Indian real estate remained steady at USD 4.3 billion in the first nine months of 2025, with full-year inflows expected to reach USD 6 billion.

Office and residential assets accounted for nearly 60% of total investments, while industrial, alternative, and mixed-use assets together attracted more than one-fifth of total capital.

2026 Investment Outlook: Deeper Institutionalisation Ahead

Institutional inflows are projected to rise to USD 6–7 billion in 2026, driven by balanced participation from domestic and foreign investors.

Emerging trends include:

• Build-to-core strategies and early-stage land investments
• Rising investments in retail and mixed-use developments
• Greater capital allocation to Tier II and III markets
• Expansion of REITs, SM-REITs, and AIF platforms
• Increased focus on ESG-compliant and sustainable assets

Together, these trends signal a deeper phase of institutionalisation for Indian real estate across asset classes.

Also Read: Mumbai Emerges as India’s BFSI GCC Powerhouse Amid Record Leasing Surge

The post India’s Industrial, Warehousing and Alternative Real Estate Assets Set for Next Growth Cycle in 2026 appeared first on Square Feat India.

APAC Capital Flows Accelerate as Investors Seek Growth

The report highlights a decisive shift in global capital allocation towards the APAC region. APAC-focused capital raising has jumped over 130% since 2024, now accounting for 11% of global real estate fundraising in the first three quarters of 2025. Investors are increasingly targeting markets with strong economic growth and diversification opportunities.

While established destinations like Japan, Australia, and Singapore remain highly preferred, India has emerged as a key growth market for real estate investment within APAC. Expanding middle-class consumption, digital infrastructure development, and a transparent regulatory framework are positioning the region as an attractive long-term investment hub.

India at the Centre of APAC Investment Strategy

The report underscores India’s rising appeal for large-scale capital deployment across core and alternative real estate assets. Investors are particularly interested in land and development-led opportunities, alongside institutional-quality stock in office, residential, industrial and logistics, and data centre segments.

Institutional investments in India totalled USD 4.3 billion during the first nine months of 2025, driven by steady quarterly momentum. With expectations of strong closures in Q4, annual investment volumes for 2025 are projected at USD 5–7 billion, supported by balanced participation from domestic and foreign investors.

Leadership Commentary

Badal Yagnik, CEO & MD, Colliers India, said:
“Investments in India’s real estate sector have demonstrated remarkable resilience. We foresee annual investments of USD 5-7 billion in 2025 and 2026, driven by robust domestic growth, rising urbanization and expanding infrastructure. Both domestic and offshore capital are expected to accelerate, reinforcing India’s position as a resilient, high-potential market.”

Vimal Nadar, National Director & Head of Research, Colliers India, added:
“Office and residential will continue to dominate investments, while industrial & logistics and alternative assets such as data centres will gain traction. Cross-border capital will remain essential as India strengthens its presence among APAC’s preferred destinations.”

Key Sectors to Drive Investments in 2026

Office & Residential

These segments are projected to contribute nearly 60% of India’s investment activity in 2026, supported by sustained occupier demand and a strong development pipeline.

Industrial & Logistics

Investor focus in APAC is led by the I&L sector, driven by e-commerce expansion. Demand for big-box warehousing, last-mile logistics, and cold-storage facilities continues to rise, particularly in India, Japan, and Australia.

Data Centres

Data centre assets are emerging as a high-growth opportunity in Singapore, Australia, and India, supported by hyperscale demand and digital infrastructure expansion.

Retail & Hospitality

Retail assets are regaining investor confidence as supply stabilizes. Hospitality and student housing are expected to attract capital as tourism rebounds and educational migration rises.

India Strengthens Position as Cross-Border Capital Magnet

The survey finds that 64% of APAC investors expect economic improvement in 2026, and nearly 60% are optimistic about liquidity and rental growth. The growing participation of family offices and high-net-worth investors is expected to intensify competition for high-performing assets.

Summarizing market sentiment, Sam Harvey-Jones, COO, Asia Pacific, Colliers, said:
“Investors are shifting decisively toward stability and opportunity as markets regain footing. Improving fundamentals and normalizing pricing expectations are fuelling optimism for 2026.”

Conclusion

With strong economic fundamentals, deepening institutional-grade supply, and expanding participation from foreign and domestic investors, India is positioned to play a central role in driving APAC real estate capital flows through 2026. A steady rise in demand across office, residential, I&L, and data centre assets is expected to keep momentum firm in the coming year.

Also Read: India Leads APAC Real Estate Investments with 88% Growth in H2 2024

The post Real Estate Investment Momentum in APAC and India to Stay Strong Through 2026 appeared first on Square Feat India.

India’s real estate sector staged a sharp recovery in Q2 2025, with institutional investments soaring to USD 1.80 billion, marking a 122% rise over the previous quarter, according to data from Vestian Research. Although the tally represented a 42% annual decline from the record levels of Q2 2024, the robust quarter-on-quarter resurgence signals a rebound in investor confidence.

Foreign Investment Dominates Despite Yearly Decline

Foreign capital continued to drive the bulk of investment activity, contributing 66% of total inflows, albeit down from 71% a year ago. In value terms, foreign investments stood at USD 1.19 billion, a 46% drop year-on-year.

“While overall inflows remained lower on an annual basis, the substantial quarterly growth reflects renewed investor confidence supported by robust macroeconomic fundamentals and strong inherent demand,” said Shrinivas Rao, FRICS, CEO, Vestian.

USA, Japan, and Hong Kong Lead the Pack

Investors from the USA, Japan, and Hong Kong were the most active, accounting for 89% of total foreign inflows during the quarter. These global giants collectively injected USD 1.06 billion, marking a 206% surge over Q1 2025.

Most of these funds were directed toward commercial assets, which received nearly 69% of the investments from these countries.

Table: Top Foreign Investors in Q2 2025

Commercial Assets See Strongest Rebound

The commercial real estate segment emerged as the clear winner, attracting USD 1.09 billion, up 256% from Q1 2025, and 76% higher year-on-year. In contrast, residential investments plummeted by 48% annually, while industrial and warehousing saw an almost complete wipeout compared to the previous year.

Table: Investment by Asset Type

Co-Investment Share Nearly Doubles

Reflecting a cautious approach to mitigate risks, foreign investors increasingly opted for co-investments rather than direct stakes. The share of co-investments rose to 15%, up from 8% in Q2 2024.

Box: Quarterly Institutional Investment Trends

Domestic Investors Remain Cautious

Domestic institutional investors contributed USD 336 million—a 47% decline year-on-year and 28% drop from the prior quarter—underscoring heightened caution amid trade tariffs and geopolitical volatility.

“This growth momentum is expected to continue as several rating agencies predict economic growth exceeding 6% during FY2026. Moreover, the recent repo rate cuts should further strengthen positive sentiment by reducing borrowing costs,” Rao added.

Looking Ahead

With economic fundamentals stabilizing and borrowing costs easing, the market is likely to witness further improvement in both domestic and foreign investment flows, particularly in the commercial sector.

Also Read: India Emerges as Global Leader in Global Capability Centres

The post Global Giants Inject $1.06 Bn into Indian Real Estate in Q2 2025, Fueling 89% of Foreign Inflows appeared first on Square Feat India.

Office Segment Leads Investment Inflows

The office segment remained the dominant asset class, accounting for one-third of the total inflows with investments totaling USD 0.4 billion. Hyderabad emerged as the prime location for office investments, attracting over half of the segment’s capital during Q1 2025.

Strong Growth in Residential and Industrial Segments

Residential investments soared nearly threefold compared to Q1 2024, reaching USD 0.3 billion and contributing 23% to the total inflows. Foreign investments accounted for over half of the residential capital, driven by significant large-scale deals and joint ventures between global investors and local developers.

The industrial and warehousing segment also maintained momentum, recording USD 0.3 billion in investments—representing a 73% YoY increase. The positive performance of macroeconomic indicators, including a high Manufacturing PMI of 58.1 in March 2025, boosted investor confidence in the segment.

Rise of Alternate Assets

Investment inflows into alternate assets, such as data centers and senior housing, remained strong at USD 0.07 billion. Data centers, in particular, gained traction, supported by capital deployment in a proposed hyperscale data center in Mumbai.

City-wise Investment Breakdown

Mumbai led the city-wise investment share with USD 0.3 billion, accounting for 22% of total inflows—a remarkable 841% YoY growth. Bengaluru and Hyderabad followed, with 20% and 18% shares respectively. Multi-city deals also constituted a significant 31% of overall investments.

Expert Insights

Badal Yagnik, CEO of Colliers India, noted, “Institutional investors continue to exhibit confidence in Indian real estate as investments rose by 31% YoY to USD 1.3 billion in Q1 2025. The sustained momentum, supported by strong economic growth and favorable policies, is expected to continue throughout the year.”

Vimal Nadar, Senior Director and Head of Research at Colliers India, added, “The residential segment has seen a significant surge in demand, driven by rising luxury housing trends and strategic joint ventures between global investors and local developers. The potential reduction in repo rates could further stimulate mid and affordable housing investments.”

Outlook for 2025

Experts anticipate that the positive investment momentum will persist, bolstered by optimistic economic projections, robust demand, and proactive government measures. The anticipated easing of monetary policy may further catalyze investments, especially in residential and industrial segments.

Also Read: APAC Investor Optimism to Drive Institutional Investments in Indian Real Estate in 2025

The post Institutional Real Estate Investments Surge to USD 1.3 Billion in Q1 2025, Marking 31% YoY Growth appeared first on Square Feat India.

APAC Investment Surge Driven by Key Markets

In the second half of 2024, total real estate investments in APAC reached $83.2 billion, marking a 6% YoY growth. South Korea, Japan, and Mainland China led the market, collectively accounting for 59% of these investments. However, the highest YoY increases in investment volumes were observed in India, South Korea, Taiwan, and Australia, with each country recording over 30% growth.

Investment Growth in APAC (H2 2024 YoY)

India’s Real Estate Investment Momentum

India saw institutional real estate investments rise by 88% YoY in H2 2024, reaching $3.0 billion. The office segment remained dominant, attracting 47% of total investments, followed by industrial & logistics assets at 27%. Mumbai emerged as the leading investment destination within India, particularly for office acquisitions.

According to Badal Yagnik, CEO of Colliers India, “Institutional investments in Indian real estate increased by 22% in 2024, totaling $6.5 billion. This trend is expected to continue in 2025, supported by strong economic growth, policy support, and easing monetary conditions.”

Institutional Investments in India by Asset Class (H2 2023 vs H2 2024)

Breakdown of India’s Institutional Real Estate Investments

The following table provides a comparative breakdown of institutional investments across different asset classes in H2 2023 and H2 2024:

2025 Outlook: Steady Growth in APAC Investments

Industry experts predict that real estate investments in APAC will remain strong in 2025, fueled by economic growth, declining borrowing costs, and an increased focus on office, industrial, and logistics assets. The retail and hospitality segments are also witnessing renewed investor interest, with retail investments in APAC growing by 31% YoY to $15.0 billion in H2 2024.

Chris Pilgrim, Managing Director of Global Capital Markets at Colliers Asia Pacific, stated, “The APAC real estate market remains resilient, with institutional investments rising steadily. In 2025, the office segment will continue to thrive, while industrial, logistics, and residential sectors will remain in focus. Retail and hospitality will also see increased activity as investors capitalize on recovery trends.”

With favorable economic conditions and an influx of foreign investments—accounting for 57% of India’s total inflows in H2 2024—India’s real estate market is expected to maintain its growth trajectory in 2025. Both foreign and domestic investors are likely to continue diversifying their portfolios, particularly in high-yield segments such as office and industrial & warehousing.

SFI Analysis

India’s real estate market demonstrated strong investment momentum in H2 2024, with an 88% year-on-year surge, reaching $3.0 billion. Office assets attracted the highest share of investments at 47%, followed by industrial and logistics at 27%. Mumbai led the surge, driven by office asset acquisitions. Institutional investments, particularly from foreign entities, accounted for 57% of the total inflows, reflecting strong global investor confidence. With easing monetary policies and stable economic growth, investment activity is expected to sustain in 2025. Segments like retail, hospitality, and alternative assets may also gain traction, diversifying India’s real estate growth trajectory.

Also Read: APAC Investor Optimism to Drive Institutional Investments in Indian Real Estate in 2025

The post India Leads APAC Real Estate Investments with 88% Growth in H2 2024 appeared first on Square Feat India.

Domestic investors followed a similar trend, with their share dropping to 30% in 2024 from 35% in the previous year. However, they too recorded a 36% growth in investment value.

A notable highlight was the rise of co-investments—joint funding by foreign and domestic investors—which surged to 16% of total investments in 2024, compared to a negligible share in 2023. Co-investments registered a remarkable 61-fold increase in value, as foreign investors leveraged the local expertise of domestic partners amid macroeconomic uncertainty.

Institutional investments in real estate reached USD 6.8 billion in 2024, marking a 61% year-on-year increase and surpassing pre-pandemic levels. This resurgence comes after a four-year decline, driven largely by the industrial and warehousing sector, which benefited from robust e-commerce and quick-commerce demand.

Shifts in Asset Investment

The commercial real estate segment, which has traditionally dominated investments, accounted for 35% of total investments in 2024, down from 61% in 2023. The decline reflects a slowdown in the IT-ITeS sector, although growing demand for Global Capability Centers (GCCs) is expected to renew interest in office spaces.

Meanwhile, the residential sector attracted USD 2 billion in investments, representing 30% of the total and a 171% increase from 2023. Similarly, the industrial and warehousing sector grew by 203%, increasing its share from 15% in 2023 to 28% in 2024.

Yearly Investment Trends

Institutional investments rebounded in 2024 after consecutive declines since 2020. The yearly investment trend highlights the following:

Expert Outlook

Shrinivas Rao, FRICS, CEO of Vestian, noted, “Despite a slow start, institutional investments in 2024 exceeded pre-pandemic levels. However, 2025 could pose challenges due to geopolitical tensions, global economic slowdown, and elevated inflation. A potential repo rate cut by the RBI could stimulate real estate activity, attracting more investors.”

Return-to-office policies, government initiatives like the Production Linked Incentive (PLI) scheme, and a focus on affordable housing are expected to boost real estate demand and investor participation in the coming years.

Key Insights:

• Foreign Investors: 54% share, USD 3.7 billion investments.
• Co-Investments: 16% share, 61-fold increase in value.
• Sector Growth: Residential investments up by 171%; industrial and warehousing up by 203%.
• 2024 Total Investments: USD 6.8 billion, up 61% year-on-year.

Also Read: cross-border investment

The post Foreign Investors Dominate Institutional Investments in 2024, Co-Investments See a 61-Fold Surge appeared first on Square Feat India.