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Domestic Investors Expand Their Role in India's Commercial Real Estate
Domestic investors in India are buying more offices and other commercial properties.
They include investment firms and funds that manage money for investors.
At the same time, less money has been coming into Indian real estate from overseas.
Some investors see this as a chance to buy good properties at better prices.
They are attracted by rent payments and demand from businesses that need offices.
Listed property trusts have also grown their holdings.
Some experts say local investors are helping make up for the drop in foreign investment.
But they caution that local investors will need affordable funding to keep doing this for a long time.
Domestic investors, including 360 ONE Asset, Nuvama and ICICI Prudential AMC, acquired commercial real estate assets worth more than Rs 15,000 crore over the past 18-24 months.
Listed REITs held about Rs 3.13 lakh crore in commercial and retail assets as of May 2026, nearly double their level at the start of FY25.
Foreign real estate inflows fell to Rs 2,208 crore in FY26, down from Rs 6,043 crore in FY21 and 29% from FY25.
Investors cited rental yields, tenant demand and potentially favourable valuations as reasons for domestic interest in office and commercial properties.
Analysts and investors said domestic capital is helping fill the gap, but sustained growth may depend on access to plentiful, affordable funding.
- Who
- Domestic investors, including 360 ONE Asset, Nuvama and ICICI Prudential AMC, as well as listed REITs.
- What
- Domestic investors are increasing acquisitions of commercial real estate as foreign investment inflows decline.
- Where
- India, including commercial property markets in Chennai, Bengaluru, Pune, Delhi and Mumbai.
- When
- Over the past 18-24 months; the article reports REIT asset values as of May 2026 and investment figures for FY26.
- Why
- Investors point to rental income, capital appreciation, tenant demand and opportunities created by reduced foreign investment.
Opportunity
Caution
Domestic capital's growing role
Opportunity
Investors and analysts say domestic buyers can take advantage of reduced foreign activity and help sustain acquisitions.
Caution
Knight Frank India's Vivek Rathi cautioned that domestic investors may not fill the gap meaningfully over the long term without abundant capital at lower rates.
Foreign investor activity
Opportunity
360 ONE Asset's Deepak Aswani said global investors remain interested in India and increasingly seek strong local co-investors.
Caution
Higher US bond yields, tighter financial conditions, geopolitical uncertainty and a weaker rupee have reduced the appeal of some investments, making global investors more selective.
Commercial property returns
Opportunity
Investors cited rental yields, rental escalations, tenant demand and exit routes through REITs and private markets as attractive features.
Caution
The article also notes that sustained domestic investment depends on access to affordable funding; it does not report a direct opposing assessment of property returns.
Key facts
- Domestic acquisitions
- More than Rs 15,000 crore in assets acquired by named domestic investors over the past 18-24 months.
- Listed REIT assets
- About Rs 3.13 lakh crore in combined gross asset value as of May 2026.
- Foreign inflows, FY26
- Rs 2,208 crore, down from Rs 3,098 crore in FY25.
- Foreign inflows, FY21
- Rs 6,043 crore.
- ICICI Prudential AMC
- Rs 5,000 crore in commercial-property assets under management; eight deals closed over 18 months.
- NCW Prime Offices Fund
- Final close of Rs 4,000 crore in 2026.
- Reported yields
- 6.5-7%, according to senior corporate adviser Chanakya Chakravarti.
Quotes
Deepak Aswani
CIO and head of real assets at 360 ONE Asset.
“The slowdown from some global investors has opened up attractive acquisition opportunities, potentially allowing players like us to step in and secure assets at more favourable valuations and terms.”
financialexpress.com
“For a short period, they [domestic investors] have filled the gap. But if they have to do this meaningfully in the long run, they need access to abundant sources of capital at cheaper rates.”
financialexpress.com
Sources
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