Equity investments in India’s real estate sector reached USD 2.9 billion in the first quarter of 2025, marking a 74 per cent increase over the same period last year, according to CBRE South Asia Pvt. Ltd.'s latest "Market Monitor Q1 2025 – Investments" report.

The report attributes the surge in investments to robust developer-led activity and sustained interest from institutional investors and REITs. Compared to Q4 2024, this quarter also witnessed a 13 per cent sequential rise in capital inflows, up from USD 1.7 billion in Q1 2024.

Land acquisitions and office asset transactions drove most of the investments, accounting for about 74 per cent of the total equity deployed during the quarter. Retail segment inflows also increased, comprising 5 per cent of the quarterly total and registering a 13 per cent quarter-on-quarter rise, largely due to growing REIT participation.

Regionally, Bengaluru, Mumbai, and Delhi-NCR attracted nearly two-thirds of the total equity inflows, collectively contributing 67 per cent. Developer contributions formed the largest investor segment, responsible for 46 per cent of total inflows. REITs followed, capturing a 23 per cent share, indicating a strengthening interest in stabilized assets.

CBRE’s Chairman & CEO for India, South-East Asia, Middle East & Africa, Anshuman Magazine, emphasized the consistent investor confidence despite global economic uncertainties. He noted that fundamentals remain strong across asset classes, supported by evolving occupier needs and dynamic market trends.

CBRE India’s Managing Director of Capital Markets and Land, Gaurav Kumar, highlighted the increased focus on development assets, especially in the residential and office space. He observed rising engagement from institutional investors and REITs, suggesting that capital deployment will likely continue in alternative asset classes like data centers and healthcare.

Investment activity is projected to continue its upward trajectory throughout 2025. Built-up office spaces and warehousing assets are expected to dominate capital inflows, supported by a steady pipeline in residential and mixed-use developments.

Metropolitan areas and tier-I cities are expected to remain the main hubs for equity deployment. A second-half pickup in investment activity is likely, depending on global macroeconomic improvements and the strategic deployment of capital reserves accumulated from 2024’s exit transactions.

Equity investments in real estate involve funding projects or acquiring assets in exchange for ownership stakes. Investors include private equity firms, pension funds, sovereign funds, REITs, developers, investment banks, and corporate groups.

The first quarter of 2025 suggests sustained momentum in India’s real estate market, driven by rising institutional participation and expanding asset class interest.