REITs To Data Centres: The Forces Reshaping India’s Real Estate Landscape

India's real estate market is quietly undergoing a structural reset. Driven by foreign capital chasing opportunistic returns for the longest time, the sector is now being reshaped by domestic institutions. Listed players such as REITs, and a growing appetite for new-age infrastructure — data centres, to be specific.

According to a recent report by real estate investment firm JLL, institutional investments in Indian real estate are expected to cross a record $1,040 crore in CY2025, marking the second straight year of all-time highs. More telling than the headline number, however, is who is writing the cheques, and where the money is going.

DIIs Take The Front Seat

For the first time since 2014, there has been a sharp reversal, and domestic institutional investors have taken the lead, accounting for 52% of total investments. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have been key to this shift, accounting for than half of all core asset acquisitions, and deploying $250 crore.

Private equity funds, too, are playing a bigger role, contributing nearly a third of all the capital deployed. Equity investments now make up over 80% of total inflows, showing a clear preference for long-term wealth creation, as compared to short-term financial engineering.

Office assets have reasserted their dominance, drawing 58% of capital in 2025, compared with just 28% a year earlier. Much of this money has flowed into prime office buildings, with Bengaluru alone accounting for 29% of total investments, and Mumbai remaining a close second.

Beyond Office Towers

The real story of this cycle, however, lies beyond traditional office towers. As India's economy moves to digitalisation, new asset classes and avenues are moving to the mainstream. Data centres, in particular, have emerged as a powerful magnet for capital inflows.

Platform commitments worth $1140 crore were announced in 2025, for deployment over the next three to seven years. Furthermore, nearly the entire amount is linked to a single data centre joint venture, involving Reliance Industries, Brookfield Asset Management, and Digital Realty Trust.

Foreign investors, meanwhile, have not retreated. While their share of investments has fallen, absolute inflows rose 18% year-on-year. This was led by US-based funds that increased their allocations sharply this year.

The rise of REITs, core office assets, and the surge in data centre investments all point to the same conclusion — India's real estate is no longer about land and buildings.