Indian Real Estate Hits $2.9 Billion as Institutional Investments Surge: Report

India’s real estate sector is witnessing a pivotal moment, driven by a surge in institutional investments and unprecedented deal activity. The July-September 2025 quarter marked a historic period for the industry, with 42 deals worth $2.9 billion, the highest-ever quarterly investment in the country’s property market. Data from Grant Thornton Bharat highlights how rapidly the sector is evolving into a more mature, institutionalised ecosystem, where transparency, governance, and yield-focused assets are becoming standard.

A Quarter That Restored Investor Confidence

The July–September period saw a remarkable flow of capital across mergers and acquisitions (M&A), private equity (PE), and capital markets. Analysts credit this momentum to growing investor confidence, supported by clearer regulations and a steady earnings outlook in the real estate sector.

Grant Thornton Bharat reports nine public market transactions during the quarter, including five initial public offerings (IPOs) and four qualified institutional placements (QIPs), alongside 33 private deals worth $1.8 billion. This surge in activity represents a strong rebound after a period of consolidation earlier this year.

“This quarter marks a turning point for India’s real estate sector, showing robust performance across M&A, private equity, REIT, and IPO segments,” said Shabala Shinde, Partner and Real Estate Leader at Grant Thornton Bharat. “The growth in marquee transactions and investor appetite for income-generating, institutional-grade assets reflects the sector’s depth and resilience.”

Domestic Deals and REITs Lead the Way

Domestic M&A activity led the charge, with 21 deals valued at $843 million, nearly all homegrown. Key transactions included The Phoenix Mills Ltd acquiring Island Star Mall Developers, expanding its retail portfolio, and Mindspace REIT purchasing The Square, its first third-party acquisition since listing, signalling growing confidence in India’s REIT market.

REITs (Real Estate Investment Trusts) have emerged as a preferred choice for investors seeking steady income and reliable returns. Their rising prominence is channeling institutional capital into India’s commercial and retail real estate, helping formalise the market further.

Private equity also made a notable comeback, with 12 deals worth $859 million. This marked a 71% increase in deal volume and a 48% rise in deal value compared to the previous quarter. Most of this capital flowed into commercial real estate and proptech ventures.

Among standout investments, Prime Offices Fund injected $290 million into RMZ One Paramount, underscoring continued investor faith in India’s office space, despite the rise of hybrid work models. Analysts note that investors are increasingly focusing on Grade-A, income-yielding assets in growth corridors such as Bengaluru, Pune, and Gurugram.

Capital Markets Boost Sector Liquidity

Public markets also saw a resurgence. Five IPOs raised a combined $805 million, while four QIPs added another $344 million, improving liquidity and visibility for listed real estate firms. Knowledge Realty Trust’s IPO alone raised $547 million, accounting for nearly 68% of public market capital for the quarter and highlighting strong investor interest in well-governed real estate platforms.

Chintan Sheth, CMD of Sheth Realty, noted, “India’s property market is clearly transitioning toward an institutional and yield-driven model. Investors now prefer structured, income-generating opportunities backed by better governance, transparency, and regulatory clarity. Proptech adoption and improved capital access are making the sector more efficient, data-driven, and accountable.”

This trend is evident in rising investor interest in commercial and retail assets offering predictable income streams. Real estate technology and consultancy firms are also seeing increased deal activity, signalling that the sector is expanding beyond traditional construction-led models.

Residential Segment Slows, but Tech Gains Traction

While commercial real estate and REITs dominated, residential property saw relatively muted investment activity. Developers, however, remain optimistic that consistent end-user demand, favourable interest rates, and festive-season launches will sustain the segment.

Meanwhile, real estate technology, including proptech startups focused on digital transactions, facility management, and analytics — recorded significant growth in both deal count and value. This demonstrates how technology is becoming central to how real estate is financed, developed, and managed in India.

With a stronger regulatory framework, a maturing REIT ecosystem, and increasing domestic institutional participation, India’s real estate sector is well-positioned for sustained capital inflows. Experts believe this wave of institutionalisation will help the market navigate global economic uncertainties and cyclical slowdowns. As investors prioritise governance-driven, transparent, and yield-oriented assets, India’s property market is moving into a new era defined by professionalism, accountability, and long-term value creation.