The Indian real estate sector is experiencing a dynamic streak, with a deal-making surge that crossed the $1 billion threshold in the first quarter alone.
This development, largely fuelled by the dominant roles played by Real Estate Investment Trusts (REITs) and private equity (PE) firms, has led to a rise in momentum of large-scale acquisitions, renewed capital confidence and a reshaping of the investment landscape.
Recent large-scale transactions highlight this trend. REIT, for instance, made significant moves with –
- Mindspace Business Parks REIT acquired Sustain Properties ($234 million, 1.82M sq ft Hyderabad office)
- Capitaland India Trust invested $175 million in a MAIA Estates Bengaluru office development
- Blackstone-backed Nexus Select Trust secured $163 million in commercial assets
Underscoring global institutional appetite in the segment, Private equity notably targeted residential:
- Blackstone invested $134 million in Kolte-Patil Developers
- Mitsubishi Estate’s $64 million stake in Birla Estates
REITs, once primarily focussed on commercial office assets, are now demonstrating a shift in strategy. Their investment landscape has broadened considerably to include warehousing, retail spaces, data centres, and even specialised industrial parks. This diversification has further been fuelled by supportive SEBI and government reforms, which have made REITs and Infrastructure Investment Trusts (InvITs) increasingly attractive. Measures such as relaxed minimum public holding norms and faster listing timelines have enhanced their appeal and operational agility.
Simultaneously, private equity firms are also doubling down on the Indian market, marked by a decisive rise in platform-level investments. They are actively involved in portfolio consolidation, merging scattered assets under scalable, efficiently managed platforms. This approach is often realised through joint ventures with established developers, providing crucial liquidity support that helps developers restructure their own portfolios.
Several factors are fanning this investment fervour, attracting both REITs and PE firms who are capitalising on emerging opportunities and reshaping the property landscape. This includes the heightened global investor interest, with significant foreign capital flows drawn to India's promise of stable returns and an improving regulatory environment. Interestingly, global high interest rates are making India’s internal rates of return (IRRs) relatively more attractive to international capital.
Amid the surge in billion-dollar-deals, the sustained appetite to invest in Grade-A assets, however, remains strong, particularly in India’s top six metropolitan cities (Mumbai, Delhi-NCR, Bengaluru, Chennai, Hyderabad, and Pune). It is the same with rapidly emerging Tier-2 logistics corridors (Indore, Lucknow, Jaipur, and Coimbatore). Recent aforementioned large-scale transactions exemplify this trend.
Looking ahead, the impressive Q1 performance sets a strong precedent for the remainder of 2025. Market analysts predict a continuation of this momentum into H2 2025, with expectations of more REIT listings, further consolidation in the warehousing and logistics sector, especially in Tier-2 and Tier-3 cities.
Beyond traditional office and retail, alternate real estate asset classes, such as industrial, logistics, data centres, and managed residential (co-living and senior living), will continue to gain traction. The synergy between REITs and private equity is not just driving transaction volume, but is instrumental in reshaping a more resilient, transparent, and mature Indian real estate market, poised for sustained growth.
