Real Estate Funding: Local Institutional Participation Rises To 48% As Overall Inflows To Stay Strong

Real estate players said the momentum reflects the growing maturity of India’s property market.

India’s real estate sector has once again found itself in the global spotlight, recording its second-highest-ever institutional inflow this year. According to Cushman and Wakefield’s India Capital Markets Q3 2025 report, India’s real estate sector attracted $4.7 billion in institutional investment during the first three quarters of 2025. Though it is a 10% fall compared to the previous year, the market is expected to conclude the year with a total between $6 and $6.5 billion, which would be the second-highest annual inflow on record, according to the report.

What was once seen as a cyclical market is now emerging as a long-term, credible investment avenue. Institutional and domestic investors are viewing Indian real estate not just as a growth story, but as a stable, scalable, and structured ecosystem backed by policy transparency and consistent demand.

The sector is, however, well on track to close the year with around $6-6.5 billion, making 2025 potentially the second-best year on record for institutional investments in commercial real estate. Real estate players said this momentum reflects the growing maturity of India’s property market, where capital is increasingly guided by performance, governance, and long-term yield potential rather than short-term speculation.

The report further stated that across India, domestic institutional participation has grown to account for 48% of inflows between January and September 2025, up from a smaller share in previous years; foreign investors made up the remaining 52%. This shift has helped stabilise the market despite international volatility. Amongst the segments, the office assets remained the primary choice, constituting 35% of inflows, followed by residential (26%), retail (12%), and logistics and industrial (9%).

Pankaj Jain, Founder & CMD, SPJ Group says, “Institutional investors are reading the pulse of India’s consumption economy correctly. Retail real estate has matured into a stable, long-yield asset class. We’ve seen a surge of investor interest in experiential retail spaces that combine leisure, dining, and shopping under one roof. Premium retail spaces located in Gurugram’s high-potential micro markets are strong examples of this transformation. This capital inflow into retail signals faith in India’s rising disposable income and long-term urban demand, creating vibrant, self-sustaining ecosystems that deliver both community and commercial value.”

Sandeep Chhillar, Founder & Chairman, Landmark Group says, Institutional confidence in Indian real estate today stems from tangible reforms and sustained demand. The sector is shining bright on the global map, with luxury housing and Grade-A commercial assets emerging as dual engines of growth. The market is witnessing capital flowing with a strong track record and governance-driven practices, which augur well for its future growth trajectory. This shift reflects how investors are prioritizing credibility and delivery over mere speculation. The fact that both domestic and institutional investors are aligning toward this space shows a maturing, value-oriented investment mindset across the sector.”

Gautam Kanodia, founder of KREEVA and Kanodia Group, said, “What’s truly exciting is the level of institutional confidence now flowing into Gurugram’s luxury housing market, particularly across emerging micro-markets like New Gurgaon, SPR, and Dwarka Expressway. These corridors have evolved into investment magnets, offering world-class infrastructure, seamless connectivity, and strong end-user demand. Institutional investors see these zones as high-potential, low-risk opportunities driven by both aspiration and accessibility. For developers, this influx of capital helps scale thoughtfully, blending luxury with livability and long-term value. It’s a reflection of how Gurugram continues to redefine urban luxury while reinforcing investor faith in India’s premium real estate story.”

Moreover, global investors increasingly see India as a reliable hedge against global volatility, drawn by its stable returns, scalable urban centers, and consistent demand across asset classes. The growing depth of domestic capital participation further amplifies this confidence, creating a balanced and future-ready investment landscape.

Ashwani Kumar of Pyramid Infratech said, “India’s housing segment has evolved beyond luxury quotient, representing lifestyle assurance and brand trust. Institutional inflows here are driven by end-user demand, not just investor sentiment. Projects that emphasize experience, sustainability, and exclusivity are attracting significant capital flow. We have observed that investor partnerships in real estate enable the creation of long-term value through design and delivery excellence. The growing presence of institutional funding in luxury housing also reflects how global investors view India’s affluent market. It’s a clear indicator of structural strength in the premium real estate segment.”

Thus, India’s real estate sector today stands at the cusp of a defining transformation where credibility, capital, and confidence seamlessly converge. As global and domestic capital align with India’s urban vision, the sector is proving itself to be not just resilient but investment-ready, globally trusted, and firmly positioned for the next decade of growth.