Investor optimism in the Asia-Pacific (APAC) region is expected to catalyse institutional investments in Indian real estate, with 2025 set to witness a significant surge in cross-border capital inflows. A recent report highlights that a growing number of APAC investors are targeting India’s real estate sector, buoyed by expectations of a favourable economic environment and lower interest rates in many markets. After a prolonged period of high inflation that left many investors on the sidelines, a forecasted reduction in interest rates is expected to re-energise transaction volumes across APAC, particularly in office and logistics sectors.
According to the findings of an extensive survey of APAC investors, 69% plan to allocate over 30% of their global assets to real estate in the next five years, underscoring a firm belief in the sector’s long-term potential. A majority of respondents also predict that regional economic growth will positively impact their investments. Specifically, 67% of investors are poised to allocate capital to the APAC region in 2025, with industrial, office, and multi-family sectors continuing to be top priorities. Nearly 61% of those focusing on the office sector aim to invest in core or core-plus CBD assets, while an overwhelming 90% expect their ESG-compliant office assets to enjoy premium returns in the next three years.
The optimism in APAC directly benefits India, which remains an attractive destination for institutional capital. India’s real estate sector has been on an upward trajectory since 2021, with institutional investments totalling USD 19 billion, growing year on year. This trend has been driven by the rising demand across core real estate sectors such as offices, industrial & warehousing, and residential properties. In fact, during the first three quarters of 2024 alone, investments have already reached USD 4.7 billion, surpassing the total of USD 4.3 billion recorded in 2023. India’s office market is particularly buoyant, fuelled by increasing demand from Global Capability Centres (GCCs) and strong domestic uptake. As the office sector continues to grow, the industrial and warehousing sectors also see strong inflows due to the e-commerce boom and logistics growth. The residential sector is witnessing increased investor interest in joint ventures and redevelopment projects in Tier-I cities, reflecting a robust appetite for residential assets.
The Senior Director at Colliers India, emphasises the potential of evolving consumption patterns, with investors increasingly looking at alternative assets like data centres, senior living, student housing, and life sciences. These segments are expected to offer significant long-term opportunities. The trend of surging APAC investment flows into India is set to continue in 2025, as institutional investors target the country’s dynamic real estate market. With strong domestic economic growth prospects, India is primed to become a key beneficiary of institutional capital looking for high-quality assets that promise stable, long-term returns.
