India’s real estate sector has kicked off 2025 with a bang, attracting USD 2.9 billion in equity investments during January-March, a staggering 74% year-on-year (YoY) increase from USD 1.7 billion in the same period last year, according to CBRE South Asia Pvt. Ltd.’s latest report, Market Monitor Q1 2025 – Investments. The report, released by India’s leading real estate consulting firm, also highlights a 13% sequential growth compared to the previous quarter, signaling robust investor confidence despite global economic uncertainties.
The surge in capital inflows was primarily driven by heightened developer activity and strong interest from real estate investment trusts (REITs) and institutional investors. “India’s real estate sector continues to demonstrate resilience and attract sustained investor interest despite global headwinds,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE. “The sharp uptick in capital inflows reflects strong fundamentals, robust demand across asset classes, and growing confidence among both domestic and foreign investors,” he added.
Key Drivers and Asset Classes
The report reveals that land/development sites and built-up office assets were the heavyweights, together accounting for nearly 74% of total capital inflows in Q1 2025. This aligns with broader trends seen in 2024, where investments in office assets and residential land acquisitions have consistently dominated, fueled by a resurgence in demand for commercial spaces and a robust pipeline for housing projects. CBRE’s earlier projections for 2024 had anticipated equity investments to hit USD 10-11 billion, a target the sector surpassed with USD 11.4 billion for the full year, marking a 54% YoY growth.
Retail assets also emerged as a bright spot, capturing a 5% share of capital inflows in Q1 2025, with a notable 13% quarter-on-quarter (QoQ) growth. This uptick was largely driven by increased investments from REITs, reflecting a growing appetite for quality retail spaces in metro cities. The Securities and Exchange Board of India’s (SEBI) small and medium REIT (SM REIT) framework, introduced in 2024, has further opened doors for smaller retail assets, particularly in tier-II cities, to attract institutional capital.
City-Wise Breakdown and Investor Trends
Bengaluru led the charge in equity real estate investments, closely followed by Mumbai and Delhi-NCR. Together, these three cities accounted for approximately 67% of the total capital inflows in Q1 2025, underscoring their status as India’s real estate powerhouses. Bengaluru’s dominance is tied to its thriving office market, driven by technology firms and global capability centers (GCCs), while Mumbai and Delhi-NCR continue to attract investments in both commercial and residential segments.
Developers remained the primary drivers of capital deployment, contributing 46% of the total equity inflows. This developer-led momentum mirrors trends from 2024, where domestic investors, including developers, accounted for 70% of total equity investments, with foreign players like Singapore, the US, and Canada contributing over 25%. Institutional investors and REITs, however, are increasingly shaping the market, particularly in office and retail assets, as they seek stable, long-term returns.
Looking Ahead
The Q1 2025 figures build on the momentum of 2024, which saw record-breaking equity investments of USD 11.4 billion. CBRE expects this positive trajectory to continue, with renewed investments in built-up office and warehousing assets and a strong acquisition pipeline for residential development sites. However, global uncertainties—such as the recent US tariff pause—could introduce volatility. For now, India’s real estate sector remains a beacon of resilience, poised for further growth in FY26.