2 min read
The narrative of Indian real estate has shifted. What was once considered an emerging market has since matured into a global institutional powerhouse. Latest market data from Q1 2026 suggests institutional investment in Indian real estate hit a record high of $8.5 Billion in 2025, marking an astounding 29% year-on-year increase.
At Chestertons Global, we are tracking these shifts closely as capital flows transition from speculative growth to stable, income-generating infrastructure.
Perhaps the most significant structural shift is the "localisation" of institutional power. For the first time, domestic institutional capital accounted for 57% of total volume, more than doubling in a single year. This indicates a confidence from Indian insurers, pension funds, and family offices who are now leading the market’s transformation.
Two cities continue to dominate the investment landscape, together capturing nearly 50% of all national inflows:
• Mumbai: Driven by a concentration of corporate headquarters, Mumbai remains the preferred destination for investors targeting sustainable, premium office assets and luxury residential redevelopments.
• Bengaluru (29% share): The undisputed capital for Global Capacity Centres (GCCs) and tech-driven institutional capital. Its ability to absorb high-quality Grade A office space remains the benchmark for the country.
The record-breaking $8.5 billion influx is due to both volume and quality.
Three factors that are driving this maturity include:
1. Grade A Focus: A flight to quality where occupiers and investors alike are prioritising ESG-compliant, high-spec office environments.
2. REIT & InvIT Maturity: With over $2.5 billion deployed via REITs and InvITs in 2025 alone, the market has found a liquid, transparent vehicle for fractional ownership of "trophy" assets.
3. Predictable Yields: In a volatile global climate, India’s commercial sector is offering stable, income-generating returns that compete with established Western markets.
As the India-UAE Comprehensive Economic Partnership Agreement (CEPA) continues to facilitate record bilateral trade (hitting $100 billion this year), the demand for cross-border logistics is at an all-time high. We expect to see institutional interest expand into high-tech warehousing and "Life Science" hubs, further diversifying the investor portfolio.
Whether you are looking to divest a portfolio or secure a footprint in India’s tech corridors, having the right transaction data is critical.
Contact Chestertons Global to learn more.
"To provide quality services and support that help grow the businesses of our network members and position them as market leaders."
Login
Don't have an account? Sign Up
Sign Up
Already have an account? Log In