India’s commercial real estate dominated investment activity in Q2 2025, accounting for 62% of total deal value. With $1.3 billion in transactions, including IPOs and QIPs, institutional interest surged in income-generating assets. The rise of SME REITs and the anticipation of India’s largest REIT issue signal deeper capital market integration.
India’s commercial real estate market continues to command investor confidence, leading the country’s real estate investment landscape in the second quarter of 2025. According to a report by Grant Thornton Bharat, commercial platforms accounted for 62% of total investments between April and June, signalling a strong institutional preference for resilient, income-generating assets.
The quarter recorded 17 transactions worth $1.3 billion, including IPOs and Qualified Institutional Placements (QIPs). Excluding public market activity, 13 deals valued at $775 million reflect ongoing investor appetite for platform-led developments and yield-focused investments.
Shabala Shinde, Partner and Real Estate Industry Leader at Grant Thornton Bharat, noted, “While overall deal values moderated, institutional capital continues to flow steadily into commercial platforms, reinforcing the asset class’s resilience.” She added that the resurgence of IPOs and SME REIT activity, along with India’s anticipated largest REIT issue, marks a turning point for real estate’s relationship with capital markets.
Capital market activity rebounded in Q2 after a sluggish start to the year. Two IPOs raised $243 million, and two QIPs brought in an additional $245 million, indicating a gradual return of investor confidence. This shift reflects the market’s growing comfort with real estate vehicles offering predictable returns and structured governance.
Notably, the emergence of Small and Medium Real Estate Investment Trusts (SM REITs) is particularly noteworthy. These vehicles, designed to unlock value for mid-sized developers, gained traction in Q2, with multiple new registrations pointing to increasing public market accessibility. The momentum behind SM REITs represents a significant evolution in India’s real estate financing landscape.
“With SM REIT momentum building and India’s largest-ever REIT issue expected in H2, the sector enters the second half of the year with cautious optimism and an institutional focus,” the report stated. As traditional financing models evolve, REITs are positioning themselves as the bridge between developers and long-term capital, offering stability in a volatile funding environment.
Looking ahead, the sector appears poised for a more innovation-led and mature investment cycle. As Shinde emphasised, the recalibration of H1 has laid the groundwork for sustained growth, backed by stronger market fundamentals and expanding investor participation through listed instruments.
For India’s real estate market, the message is clear: institutional investors are leaning into commercial platforms, and capital markets are stepping up to play a defining role in what could be a transformative year for the industry.
