Domestic investors, REITs drive record $5.1 billion inflows into Indian real estate in Q1

MUMBAI: India’s real estate sector continues to attract strong institutional capital, emerging as a key beneficiary of domestic liquidity and improving confidence in yield-generating assets, even as global macroeconomic uncertainties persist.

Capital inflows into the sector rose sharply to a record $5.1 billion in the January-March quarter, marking a 72% on-year increase, showed data from CBRE South Asia. The quarter also saw a 53% sequential growth from $3.3 billion in the previous quarter, reflecting sustained momentum in capital deployment.

The surge in investments was largely driven by domestic investors, who accounted for about 96% of total inflows. Developers led capital deployment with a 42% share, followed closely by Real Estate Investment Trusts (REITs) at around 40%. Notably, REIT investments crossed $2 billion during the quarter, registering a multi-fold increase compared to the previous quarter.


“This underscores the high confidence of domestic investors and institutional players in the Indian real estate growth story,” said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE. “Despite global macroeconomic headwinds, our resilient economic framework continues to attract deep capital. The multi-fold increase in REIT activity is particularly encouraging, signalling a maturing market that is increasingly shifting towards institutionalised, yield-generating assets.

Going forward, he expects foreign capital to re-engage strongly, driven by clearer deployment strategies.

“The composition of capital flows is clearly evolving, with domestic investors stepping in earlier across both land and income-yielding assets. For developers, this improves execution visibility and reduces dependence on traditional funding cycles. What we are seeing now is a more predictable, partnership-driven investment environment that supports disciplined expansion and faster project turnaround,” said Mayur R. Shah, Vice-Chairman, Marathon Nextgen Realty and former president of CREDAI-MCHI.

Investment activity during the quarter was concentrated in built-up office assets and land or development site acquisitions, which together accounted for more than 90% of total equity inflows. A significant portion of capital deployed towards land acquisitions was directed at mixed-use and residential projects, which accounted for over 73% of site-related investments. The remaining capital was allocated to office, warehousing and hospitality developments.

“We are observing a sustained preference for high-quality office space, underpinned by significant inflows from domestic institutional capital, as well as foreign capital, most notably via REITs,” said Gaurav Kumar, MD & Co-Head, Capital Markets, India, CBRE.

According to him, this demand coupled with increased site acquisitions for mixed-use & residential development, underscores a resilient market outlook. Looking ahead, he expects the next phase of investment to be defined by a strategic balance of yield-focused income assets and high-growth opportunistic plays.

Geographically, Bengaluru, Mumbai and Delhi-NCR together accounted for around 65% of the total investment share, reaffirming their dominance as key real estate markets. On the foreign investment front, capital from Singapore and Canada contributed about 72% and 27%, respectively, of total overseas inflows.

The formation of new investment and development platforms worth $234 million during the quarter, further reinforced the underlying strength of the residential segment alongside the broader investment surge.