H1 2025 Real Estate PE Inflows by City (USD Million)

“The current global economic environment marked by persistent inflation and tighter monetary conditions has led many Western funds to take a cautious stance,” said Shishir Baijal, CMD, Knight Frank India. “Yet Mumbai continues to attract capital due to its strong real estate fundamentals.”

Sector-wise Trends: Office Assets Shine, Warehousing Dips

While overall capital inflow dipped, sectoral performance varied significantly:

PE Investment by Segment (H1 2025)

The office sector led PE activity with USD 706 million, growing 22% YoY. Mumbai was a key hub for these investments, especially in Grade A commercial assets with strong cash flows and long-term leases.

“Rather than broad-based exposure, investors focused on high-quality, stabilised or REIT-ready office properties,” said the report.

On the contrary, warehousing saw a major pullback, receiving only USD 50 million—its lowest since 2018.

Residential Investments: Mumbai Draws USD 115 Million

Mumbai attracted USD 115 million in PE for residential real estate, placing it third behind Bengaluru and Pune.

Residential PE Investments by City (USD Million)

A key trend was the return of debt-driven instruments, with 60% of residential investments via credit structures, as investors prioritized collateral-backed risk mitigation.

Why Mumbai Leads: Key Takeaways

• Prime office locations with high absorption rates
• Consistent demand in mid-to-premium residential segments
• Institutional investor familiarity and REIT-ready projects
• Strategic location advantage and deep capital markets

“As macroeconomic conditions in the West stabilize, global capital is likely to return, with Mumbai remaining a key entry point for institutional investors,” added Baijal.

Also Read: India’s Office Boom Narrows to 15 Hotspots

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