Domestic Investors Fuel India's Commercial Real Estate Surge

Amidst declining foreign capital, domestic investors have significantly ramped up their activity in India's commercial real estate sector. Over the past 18 to 24 months, entities such as 360 ONE Asset, Nuvama, and ICICI Prudential AMC have collectively acquired assets valued at more than Rs 15,000 crore.

Listed Real Estate Investment Trusts (REITs) have also pursued an aggressive expansion strategy. As of May 2026, their combined gross asset value (GAV) in Grade-A commercial and retail properties reached approximately Rs 3.13 lakh crore, nearly doubling since the beginning of FY25.

This increased domestic participation is partly a response to a substantial decrease in foreign investment. Inflows fell to Rs 2,208 crore in FY26, a significant drop from Rs 6,043 crore in FY21. This moderation in foreign capital has created attractive acquisition opportunities at favorable valuations.

Experts highlight India's cost-efficient talent pool, especially from global capability centers, as a key driver for tenant demand. Commercial real estate offers investors a hybrid opportunity, combining equity-like capital appreciation with fixed-income-like rental yields. High-quality office assets and large portfolios are particularly favored.

While domestic investors have successfully bridged the gap left by foreign capital, sustained long-term growth will require continued access to abundant and cheaper capital sources. Global investors remain interested but have become more selective, often seeking strong Indian co-investors.