Mumbai tops real estate equity investments with US $6.9 bn between 2022-24, highest in India: CBRE-CII Report
FinTech BizNews Service
Mumbai, 22 April 2025 – CII - CBRE South Asia Pvt. Ltd., announced the findings of its joint report titled, ‘Bricks & Billions – The winning formula for real estate and BFSI.
The CII-CBRE joint report provides a view of the real estate landscape and prevailing financing strategies, as well as the real estate equity and debt investment landscape, AIF landscape, and strategic insights. According to the report, Mumbai topped the real estate equity investment with the highest inflow of US$ $ 6.9 bn, accounting for 26% share in the total real estate equity investments between 2022-24. Mumbai, Delhi-NCR, and Bengaluru attracted around US$ 16.5 bn, accounting for a cumulative 62% share during this period. This sustained dominance of gateway cities was driven by a high concentration of investment-grade projects, robust urban infrastructure, a skilled talent pool, strong demand across asset classes, and a steadily formalising real estate ecosystem. Among the asset classes, in Tier-I cities, development sites and land assets attracted the largest share of equity investments, accounting for a 44% share of total inflows between 2022-24, followed by the office sector, which had a 32% share. Total real estate equity investments during 2022-24 stood at US$ 26.6 bn across top six major cities in India.
Between 2022-24, tier-II cities accounted for nearly 10% of total real estate equity investments, amounting to approximately US$ 3 bn. During this period, site developments emerged as the leading investment sector in tier-II cities, attracting approximately 47% share of the total tier -II capital inflows, followed by the industrial and logistics (I&L) sector, which accounted for around 25% share. Sustained economic momentum in tier-II cities driven by rapid industrialisation, rising consumption, and expanding infrastructure has positioned them as attractive destinations for investors.
As per the report, Institutional investors remain confident in India’s long-term growth story, driving 33% share of real estate investments between 2022-24, while developers accounted for ~46% share. With limited core market opportunities, investors are increasingly turning to opportunistic strategies, including joint ventures and development agreements, to build core assets. Institutional capital continues to focus on built-up office assets and residential sites, while domestic developers sustained investments in land and the office sector, underlining their strategic priorities.
Land/development sites continue to be top investor choice
As per the report, real estate capital continues to focus on development sites and land, underscoring long-term growth bets—residential alone accounted for ~61% share of such investments between 2022-24. The office sector is poised for stable investment in 2025, with domestic fund houses actively acquiring assets and raising capital. Despite global caution, India saw a 4x Y-o-Y jump in foreign institutional office investments in 2024. The logistics and warehousing sector are also expected to sustain its momentum, supported by industrial integration, IPO prospects, and a push for value-added services. Investors are eyeing both ready-to-occupy assets and greenfield opportunities. Retail, too, presents a strong outlook for 2025, led by niche investors, though success will depend on integrated ownership, operational capabilities, and active asset management.
Rishi Kumar Bagla, Chairman, CII Western Region and Chairman & Managing Director, BG Electricals and Electronics, said, “India’s real estate sector is rapidly institutionalising, creating a more transparent, risk-mitigated environment that aligns with global investor expectations. Enhanced due diligence frameworks, sustainable development mandates, and stronger compliance protocols are becoming the norm. With 1 in 5 investors prioritising green buildings, ESG-led investment strategies are no longer optional—they are central to long-term value creation. As the sector becomes more structured and regulated, we expect deeper participation from global funds, especially those focused on sustainability and resilience."
He also stated that, India's population is on a rise and India needs more modern cities to cater to the Aspirational Needs to New India. And it will be interesting to know how the real estate sector is poised to address this challenge.
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “India’s real estate sector is entering a new phase of growth, powered by robust capital inflows and a significant pool of dry powder ready for deployment. The strong investor sentiment, especially in residential and office assets, is underpinned by sound fundamentals and steady end-user demand. As seller-buyer expectations continue to align post-market corrections, we foresee a conducive environment for high-quality investments across both core and value-add strategies in 2025. We believe this momentum will sustain as India’s structural reforms and corporate evolution continue to attract long-term capital.”
Rami Kaushal, Managing Director, Consulting & Valuation Services, India, Middle East, Africa, CBRE, said, “The next wave of real estate investment in India will be defined by the growth of alternate sectors—data centres, co-living spaces, and mixed-use developments. These segments are benefiting from digital acceleration, changing urban lifestyles, and favourable government policies. With land acquisition and platform-level investments already gaining traction, we anticipate increased investor interest in these future-ready asset classes. The market is clearly maturing beyond traditional sectors, offering diversified, innovation-led opportunities for both domestic and international capital.”
Outlook and other observation
Institutionalisation & Market Transparency
• Continued institutionalisation of India's real estate sector is leading to a more robust, transparent market aligned with global standards.
• Increased transparency and reduced risks are enhancing credibility and boosting global competitiveness.
• Both domestic and international investors, along with banks, stand to benefit from improved governance and lower-risk environments.
• Growing momentum is driving capital deployment into large-scale developments, diversified portfolios, and innovative financing models.
Key Themes Likely to Influence the Sector (Short to Mid-Term)
1. Public Equity Market Potential
• Strengthening capital markets are prompting real estate companies to explore public listings.
• IPOs from flexible space providers are anticipated, indicating rising investor confidence.
• Optimism in the office sector may trigger more REIT listings in the coming quarters.
• Broader adoption of SM REITs expected from 2025 onwards, building on the success of REITs and InvITs.
2. Lower Financing Costs
• RBI’s shift from a 'neutral' to 'accommodative' stance signals focus on growth.
• With inflation under control and rural demand improving, two repo rate cuts in 2025 are likely to lower borrowing costs.
• Cheaper financing expected to stimulate real estate investments across sectors.
3. Developer Activity to Stay Strong
• Developer land acquisitions expected to remain upbeat or accelerate in 2025 and beyond.
• Activity driven by firms with strong balance sheets and clear development plans.
• Focus areas include residential, office, and mixed-use projects.
Top Investor’s Pick:
Core Sectors to Remain in Focus
• Residential and office sectors continue to dominate investor interest.
• India’s residential market is poised for stable growth in 2025 due to:
o Strong market fundamentals
o Rising appetite for homeownership
o Increasing disposable incomes
o Ongoing infrastructure development
• Elevated project launches expected, backed by ~USD 5.8 billion in land acquisitions during 2023–24.
• The office sector is set to grow further after two years of record leasing, driven by:
o Expansion by global and domestic occupiers
o Continued demand from the technology sector
o Growth from BFSI, engineering & manufacturing (E&M), and life sciences sectors
Promising Horizons in Alternate Sectors
• Alternate sectors remain attractive for investors with strong capital inflow projections.
• Data centres to see continued investment due to:
o Accelerated digital transformation across industries
o Strong policy support from central and state governments
o ~220 acres of land acquired in 2024 (15x YoY increase)
o ~USD 1 billion capital inflow into data centre development platforms in 2024
• The co-living sector is gaining traction due to:
o Rising cost of living
o Higher adoption among India’s young professionals
o Attractive returns and high growth potential
Quality assets take centre stage for investors
Sustainability on Investors’ Horizon
• Growing investor focus on sustainable and green developments
• ~20% of investors plan to acquire or develop green buildings, per CBRE survey
• Rise in demand for high-quality sustainable workspaces in India
• Investors anticipate a modest premium for sustainable assets in the Indian market
Increased Scope for Due Diligence
• India's dynamic real estate market calls for enhanced due diligence
• Investors are conducting:
o Rigorous technical assessments
o Proactive pre- and post-investment risk monitoring
• Key areas of evaluation include:
o Regulatory compliance
o Cost structures
o Project oversight
• Focus on adherence to established standards to:
o Safeguard investments
o Enable informed decision-making
o Identify potential risks and opportunities
Equity investments in the real estate sector involve providing capital to acquire, develop, or operate real estate assets in exchange for a share of the ownership and the potential profits generated by those assets. Equity investments include those by private equity funds, pension funds, sovereign wealth funds. institutional investors, real estate developers, real estate fund-cum-developers, investment banks, corporate groups, and REITs, etc
