India Climbs to Fourth in Global Real Estate Rankings as APAC Investment Hits $71.9 Billion in H1 2025

Real estate investment across the Asia-Pacific region maintained its strategic momentum in the first half of 2025, even as headline figures reflected a modest retreat from the prior year. According to Colliers’ Investment Insights H1 2025 report, total real estate investments across nine major APAC markets — Australia, Mainland China, Hong Kong, India, Japan, Singapore, South Korea, New Zealand, and Taiwan — reached USD 71.9 billion, marking a 6 per cent year-on-year decline. The pullback was largely attributed to ongoing global trade volatility and macroeconomic headwinds, yet the broader trajectory for the region remains resilient, with analysts forecasting a meaningful rebound in the second half of the year.

What stands out within this regional picture is India’s rising prominence. The country has emerged as the fourth-largest global destination for cross-border capital into land and development sites, according to Colliers’ Global Capital Flows Report for September 2025 — a jump from seventh position just the previous quarter. That upward movement signals not a flash of transient interest but a deepening structural shift in how global investors perceive India’s long-term real estate proposition.

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A Region Under Pressure, But Holding Firm

The 6 per cent decline in APAC-wide investment volumes should be read in context. Global capital markets faced significant headwinds in H1 2025, with inflationary pressures, currency volatility, and trade friction affecting deal timelines and pricing across the board. Despite this, the APAC region demonstrated what Colliers describes as “strategic resilience,” with sectoral shifts and fundraising momentum pointing to evolving investor priorities rather than a fundamental loss of confidence.

Lucy Mallick, International Capital Lead at Colliers, noted that investment volumes across global capital markets remained subdued in the opening half of 2025, but expressed confidence that inflation easing and monetary policy stabilisation across key markets would accelerate capital flows into the second half. Office assets continued to lead as the most preferred investment class, accounting for 36 per cent of total investment volumes across APAC, with South Korea and Japan driving the bulk of activity in this segment.

Retail investment was a bright spot, rising 13 per cent year-on-year, driven by transaction activity in Australia, South Korea, and Mainland China. Large-scale shopping centres showed renewed optimism, particularly in high-density urban locations where population growth is accelerating and consumer footfall is recovering. South Korea, Japan, and Australia together accounted for nearly two-thirds of total APAC investment volumes during the period, underscoring how domestic capital depth and a stable institutional investor base can sustain activity even during global downturns.

The region’s growing appeal in land and development investment is especially notable. Seven of the top ten global destinations for land and development capital are located in APAC, according to the Global Capital Flows Report, underlining the region’s expanding role in the global real estate investment ecosystem.

India’s Investment Story: Resilience Beneath the Numbers

India attracted real estate investment totalling approximately USD 3 billion in the first half of 2025 — a 15 per cent year-on-year decline in absolute terms, but a figure that masks an important compositional shift beneath the surface. Foreign investments held steady at USD 1.6 billion, accounting for 52 per cent of institutional inflows. What changed materially was domestic capital: according to Colliers’ data, domestic capital deployment surged 53 per cent year-on-year, contributing nearly 48 per cent of total investments.

This is a structurally meaningful development. In many emerging markets, a reliance on foreign capital creates vulnerability to external shocks — when global sentiment sours, capital retreats, and domestic markets can be left exposed. India’s growing pool of domestic institutional capital acts as a counterweight, insulating the market against volatility while also signalling the maturation of local investment infrastructure.

Badal Yagnik, Chief Executive Officer of Colliers India, framed the moment clearly: “India continues to stand out as a promising country within Asia Pacific’s real estate investment landscape. Foreign investments remained strong at USD 1.6 billion and accounted for around 52 per cent of institutional investments in India during H1 2025. APAC investors contributed more than one-third of these inflows, reaffirming India’s strategic importance in cross-border capital flows.”

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Where the Money Is Going: Asset Classes in Focus

Within India, residential and office assets collectively drove more than half of all real estate investments during H1 2025. Residential projects alone attracted around USD 0.8 billion, reflecting sustained end-user demand and improving affordability conditions in key urban centres. In the office segment, institutional investors are increasingly structuring partnerships with domestic developers to acquire or co-develop grade-A assets, signalling a longer-term commitment to the commercial real estate cycle.

According to Colliers’ 2026 real estate outlook for India, the office segment remained buoyant throughout 2025, crossing 50 million square feet of leasing in the first nine months — led primarily by Global Capability Centres, which accounted for approximately 40 per cent of total demand. The industrial and warehousing segment also scaled up during the year, supported by domestic manufacturing expansion, logistics modernisation, and sustained Grade A space demand from third-party logistics players and e-commerce firms.

Perhaps the most striking trend in India’s H1 2025 investment picture is the dramatic rise of mixed-use and retail developments. Together, these two asset classes accounted for more than 30 per cent of total real estate investments in India during the period — up sharply from just 7 per cent during the same period in 2024. This reflects growing developer and investor confidence in integrated, live-work-play projects that combine residential, retail, entertainment, and lifestyle spaces within a single development, particularly in high-density urban locations.

The Rise of Alternative Asset Classes

Beyond the core segments, India’s real estate investment landscape is undergoing a broader diversification that is beginning to mirror trends already well established in more mature markets. Colliers and other industry observers have identified data centres, senior living, and life sciences real estate as the next frontier for institutional capital in India — alternative asset classes that offer defensive income profiles, long-term demand visibility, and exposure to structural demographic and technological shifts.

India’s data centre market has scaled significantly, growing to more than 1,300 MW of capacity with a real estate footprint of nearly 16 million square feet across the top seven markets — more than double its level from five years ago. This growth is being propelled by surging demand for cloud computing and digital services, accelerated adoption of artificial intelligence, and stricter data localisation norms that require companies to store data within Indian borders. According to Colliers’ Real Estate 2047 report, India’s data centre capacity is expected to reach nearly 4.5 GW by 2030 and surge to 10 GW by 2047.

Senior living is another segment that is rapidly transitioning from a niche category to a recognised institutional asset class. India currently has more than 140 million people aged 60 and above, and the demand for organised senior housing is vastly outpacing supply. According to Mordor Intelligence, the India senior living market stands at USD 3.55 billion in 2025 and is forecast to reach USD 11.58 billion by 2030, at a compound annual growth rate of 26.67 per cent. Mature campuses are recording average occupancy rates of 92 per cent, and annual fee increases of 4 to 5 per cent are helping operators offset inflation.

Colliers estimates the current demand for senior housing at 18 to 20 lakh units, but the organised supply stands at just around 20,000 units — a penetration rate of approximately 1 per cent, compared with 6 to 7 per cent in the US, UK, and Australia. That gap represents both a challenge and an extraordinary opportunity for developers and investors willing to take a long-term view.

Life sciences real estate is the third pillar of this alternative investment story. India ranks second globally in terms of the number of US FDA-certified manufacturing plants located outside the United States, and demand for R&D hubs, incubators, wet laboratories, and biotech campuses is growing alongside the country’s expanding pharmaceutical and biotechnology exports. Analysts estimate that the requirement for life sciences R&D real estate in India could grow to between USD 16 billion and USD 34 billion over the next decade, depending on the pace of sector expansion.

Policy Tailwinds and Structural Confidence

India’s rise in global real estate rankings is not happening in a policy vacuum. A range of regulatory and fiscal reforms are actively supporting investor confidence. The government’s ongoing GST simplification efforts are lowering compliance complexity for real estate transactions, while the expansion of Real Estate Investment Trusts (REITs), Small and Medium REITs (SM-REITs), and Infrastructure Investment Trusts (InvITs) is reshaping ownership structures and broadening access to income-generating assets for a wider pool of investors.

Improving yield spreads are also making Indian real estate more attractive on a risk-adjusted basis relative to competing markets. As benchmark lending rates have come down — with a cumulative 125 basis point reduction during 2025 — both developers and buyers have found financing conditions more supportive. Housing sales remained resilient throughout the year, and luxury segment performance was particularly striking: CBRE data cited by industry leaders showed home sales and new launches crossing 200,000 units between January and September 2025, with luxury apartment sales surging 97 per cent year-on-year.

Vimal Nadar, National Director and Head of Research at Colliers India, summarised the investment case succinctly: “India’s prominence in the Asia Pacific region continues to grow, driven by strong demand traction across real estate asset classes. Investor confidence is reflected in its recent rise to fourth place in terms of cross-border capital deployment in land and development sites, up from seventh position in the previous quarter. Favourable policies, improving yield spreads, and rising appetite for asset diversification are set to support sustained inflows. The second half of 2025 is poised to perform equally well, with rising investments in core segments like office and residential, along with traction in alternative assets such as data centres, senior living, and life sciences.”

The Road Ahead: H2 2025 and Beyond

Across APAC, Colliers expects investment activity to improve meaningfully in the second half of 2025. Easing inflation, stable monetary policy, and improving yield spreads are the immediate catalysts. But the more durable forces shaping the region’s real estate story are structural: rapid urbanisation, demographic shifts, infrastructure investment, and the expansion of technology-driven sectors that create new demand for specialised real estate.

India, in particular, appears positioned to sustain and potentially accelerate its ascent. Institutional investments in Indian real estate during the full year 2025 were expected to exceed USD 6 billion, according to Colliers’ 2026 outlook — building on a full-year 2024 trajectory that already reached USD 4.7 billion in the first three quarters alone. The broadening of the investable universe — from traditional office and residential assets to data centres, senior living, life sciences, and mixed-use developments — is expanding the pool of capital that views India as a viable and compelling destination.

For global investors seeking exposure to a large, rapidly urbanising economy with improving regulatory frameworks, a deepening domestic capital base, and a real estate market that is increasingly sophisticated in its asset diversity and yield profile, India’s fourth-place ranking in global land and development capital flows is not just a data point. It is a directional signal that the country’s real estate story is entering a more mature and globally integrated phase — one that is only likely to grow more compelling as the decade progresses.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

9th March, 2026