Equity Investments In India’s Real Estate Sector Surge 48%: CBRE

Investment in India’s real estate market is set to stay strong in the coming months, fuelled by two main factors: investments in existing office and retail properties, and new developments on fresh land.

According to the CBRE South Asia Q3 2025 Market Monitor report, the year is expected to end on a high note, with capital flowing into key areas such as residential projects, mixed-use developments, data centres, and industrial & logistics (I&L) hubs.

Equity investments in Indian real estate rose 48 per cent to USD 3.8 billion during July-September as builders and investors pumped in funds mainly for land acquisition and construction of projects, according to CBRE. The momentum, driven by a mix of domestic and global investors, underscores the sector’s growing depth and resilience amid a changing economic landscape.

In the first nine months of 2025, the equity investments increased 14 per cent annually to USD 10.2 billion from USD 8.9 billion in the same period last year.

Strong Quarter Caps Steady Year of Growth

The surge in Q3 was led by large capital deployments into land parcels, development sites, and built-up office and retail assets. Investors are increasingly betting on both greenfield and income-generating opportunities, reflecting a maturing real estate market that’s balancing long-term development with near-term returns.

Cumulatively, the first nine months of 2025 saw total equity investments touch $10.2 billion — a 14% increase compared to $8.9 billion in the same period last year. The numbers point to sustained optimism across asset classes, particularly as India’s economy stabilizes and infrastructure projects expand across major cities.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said the latest figures reaffirm the sector’s strength. “India’s real estate market is entering a phase of accelerated growth, driven by continued investor confidence. In the coming quarters, greenfield developments are expected to maintain strong momentum across residential, office, mixed-use, data centres, and industrial and logistics sectors,” he said.

Land, Office, and Retail Dominate the Investment Mix

CBRE’s data shows that land and development sites, along with built-up office and retail assets, together accounted for more than 90% of total inflows during Q3 2025. This split highlights a two-pronged investment trend: developers and funds are chasing long-term development potential while also securing ready assets that generate stable rental yields.

Gaurav Kumar, Managing Director, Capital Markets and Land, CBRE India, said the evolving mix of investors and assets marks a healthy diversification. “The investment landscape is becoming more balanced, with capital flowing into both built-up and development assets. India’s ability to combine strong domestic capital with institutional participation from global players will continue to be a key differentiator in 2026 and beyond,” he said.

Mumbai Leads, Pune and Bengaluru Close Behind

Among India’s top investment destinations, Mumbai retained its dominant position, attracting nearly a third (32%) of all inflows during the quarter. Pune followed with around 18%, while Bengaluru accounted for 16%. Analysts say these three cities continue to attract investors due to their strong commercial ecosystems, robust infrastructure, and ongoing housing demand.

Delhi-NCR, Hyderabad, and Chennai also saw steady investor interest, though at relatively lower levels, suggesting that capital deployment remains concentrated in established markets where demand and absorption are more predictable.

Developers and Institutions Drive Activity

Developers emerged as the leading contributors to capital deployment in Q3, accounting for 45% of total inflows. Institutional investors, including private equity funds, sovereign wealth funds, and pension funds made up 33%. The mix signals a healthy blend of entrepreneurial and institutional capital, a trend that CBRE expects to strengthen as India’s property sector becomes more structured and transparent.

Analysts also note a steady rise in domestic capital participation, particularly from large Indian developers who are increasingly partnering with global investors to co-develop or acquire assets. This dual flow of capital, experts say, is helping improve liquidity and build long-term confidence in the market.

Outlook: A Strong Finish to 2025

CBRE expects 2025 to close on a high note, supported by continued inflows into office and retail assets. Greenfield projects, especially in residential, mixed-use, and data centre developments are projected to sustain healthy activity levels through the end of the year.

However, the report also flags that the supply of ‘core’ office assets available for acquisition remains limited, which could push investors toward more opportunistic or value-add strategies. This shift may see funds targeting redevelopment projects or under-construction assets where they can unlock greater returns.

Market watchers say the sector’s fundamentals, rising urbanization, a growing middle class, and steady demand for high-quality commercial and residential spaces - remain strong. Combined with supportive policy measures and an improving credit environment, India’s real estate market is well-positioned for another year of solid performance.

If the momentum seen in Q3 carries through, 2025 could go down as one of the most active years for real estate investments in recent memory, setting the stage for a broader cycle of growth in 2026 and beyond.

Here are the key points:

• Investment Surge: Equity inflows into India’s real estate sector rose approximately 48% YoY to USD 3.8 billion in Q3 2025, compared to $2.6 billion in Q3 2024.
• Strong 9M Performance: Total investments during Jan–Sep 2025 stood at USD 10.2 billion, marking a 14% YoY increase from the same period last year.
• Asset Mix: Land/development sites and built-up office & retail assets accounted for over 90% of total capital inflows in Q3 2025.
• City Leaders: Mumbai (32%), Pune (18%), and Bengaluru (16%) emerged as the top investment destinations during the quarter.
• Investor Profile: Developers (45%) and institutional investors (33%) were the key contributors to equity inflows