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India’s capital markets narrative in real estate is being defined by sustained investment momentum and expanding institutional participation across core and alternative real estate segments. Capital mobilisation in 2025, including $5 billion1 raised for real estate, infrastructure, and alternative investments, is expected to be progressively deployed into acquisitions and development opportunities over the next three to five years.
Equity investments into India’s real estate sector surged 25 per cent Y-o-Y in 2025, reaching a record $14.3 billion. This growth was primarily underpinned by a significant influx of capital into land / development sites and built — up assets.
While deal activity remained elevated with 271 transactions (compared to 278 in 2024), the average deal size rose to $53 million, up from $51 million in the previous year. Notably, mid-sized deals in the $10-50 million range accounted for 22 per cent of total inflows. Within the broader APAC market, where equity capital inflows surpassed $166 billion in 2025, India ranked fifth with a 9% share of regional activity. Japan and China collectively accounted for almost half of the region’s total investment volume.
Domestic investors (primarily developers) injected $10.6 billion, representing 74 per cent of overall activity in 2025. Foreign inflows totalled $3.7 billion during the same period, with institutional investors from the US and Canada comprising 65% of these inflows.
Debt financing scales a new peak Debt financing through banks, NBFCs, trusteeships, NCDs, and other channels soared to a new peak of $55.8 billion in 20252, marking a nearly 43 per cent increase compared to the previous year and growing at a CAGR of about 15% since 2017. A majority of this financing was channelled into key markets such as Mumbai, Delhi – NCR, Bengaluru, and Hyderabad, highlighting their key role in the sector’s growth.
Multi-city deals accounted for nearly 23% of total debt financing during 2025, reflecting evolving funding structures within the sector.
India’s real estate sector is poised for sustained investment momentum in 2026, building on the robust activity witnessed in the previous year. This outlook is underpinned by increasing institutional maturity and a transition towards more resilient, long-term capital flows.
The investment landscape for India’s commercial office sector is projected to maintain a positive momentum in 2026, as influx of institutional capital is expected from international sovereign and pension funds, alongside a strengthening domestic fund and Alternative Investment Fund (AIF) ecosystem.
Another clear strategy is emerging—while REITs are expected to focus on acquiring core and core -plus assets for portfolio stability, investor interest in value-add strategies remains robust.
The industrial sector continues to exhibit steady performance, while the logistics segment is witnessing a simultaneous phase of consolidation and expansion.
The retail investment landscape for the year remains robust, with specialised investors, developers,and a retail focused REIT continuing to drive acquisition and development activity.
The next frontier of real estate growth India’s alternative real estate sectors is poised for sustained momentum in 2026, with substantial capital flowing into data centres (DCs), flexible workspace solutions (FWS), healthcare, hospitality, and living platforms. Improved exit visibility —supported by robust equity markets and successful IPOs—is strengthening investor confidence, even as evolving market conditions influence allocation strategies.
Heading into 2026, the investment landscape is likely to witness a resurgence in private equity participation in the residential sector, signalling a gradual shift away from the debt-centric focus of the past decade. With fewer distressed assets available, AIFs and other lenders could increasingly evaluate land funding and growth capital opportunities.
The Indian real estate sector experienced a pivotal shift in 2025, driven by a wave of successful IPOs across the REIT, SM REIT, residential, and flexible workspace segments.
Is registration of Will compulsory? If unregistered, can a case be filed in a court of law? Harshad Bhatt, Sharjah.
A Will is not compulsorily registrable and unregistered Will is as good as a registered Will, provided all the requirements are complied with. Any aggrieved party can always bring about a cause of action in the jurisdictional Court.
I have inherited ancestral property in India. Can I gift it to my relative? Are there restrictions? Kindly clarify. Naresh Karda, Dubai.
If it is ancestral property, heirs get the right by birth, depending on the religion they belong to in India. The property can be passed on by reorganisation, by way of family settlement or a division in case of a HUF (Hindu Undivided Family). If you want to gift your share from ancestral property, you can do it without any restrictions as it is like your self-earned property.
