Kolkata has emerged as India's undisputed leader in institutional investment growth within the real estate sector for the year 2025, registering an unprecedented surge of 400% compared to the previous year. This remarkable achievement, highlighted in a recent study by Colliers India, was significantly propelled by a landmark consortium deal involving Blackstone and the South City project.
Kolkata Outpaces Major Metros with Record-Breaking Growth
The data reveals a staggering contrast in performance across cities. While Kolkata's institutional investment skyrocketed by 400%, it was followed by Bengaluru at 277% and Hyderabad at a more modest 44%. In concrete financial terms, Kolkata attracted investments worth nearly $0.4 billion (approximately Rs 3,500 crore) in 2025, a dramatic leap from the Rs 650 crore recorded in 2024.
A spokesperson attributed this explosive growth to large-scale transactions in the retail segment, stating that the marquee South City deal played a decisive role. The deal underscored a growing investor appetite for stabilized, income-generating retail assets in the city, marking a significant shift in its investment landscape.
National Landscape: Domestic Capital Drives All-Time High
Kolkata's success story unfolded against the backdrop of a record-breaking year for the entire Indian real estate sector. According to Colliers India, total institutional investments reached an all-time high of $8.5 billion in 2025, marking a 29% year-on-year growth.
The driving force behind this national surge was domestic institutional capital. Inflows from Indian investors more than doubled to $4.8 billion, accounting for 57% of the total annual volume. This robust growth signals rising confidence among domestic institutions, fueled by improving asset quality, stable returns, and greater market transparency.
While foreign capital deployment moderated by 16% to $3.7 billion, the final quarter of 2025 showed signs of a recovery in cross-border investments, hinting at a gradual improvement in global sentiment. The fourth quarter alone witnessed a historic $4.2 billion in investments, the highest for any quarter on record.
Sectoral Trends and Future Outlook
Office assets continued to be the most favored, attracting 54% of the total annual inflows. They were followed by investments in residential, industrial, and warehousing assets. Badal Yagnik, CEO & MD of Colliers India, noted that private equity investments in Indian real estate reached a new peak in 2025, bolstered by the record capital deployment in the last quarter.
Industry leaders are optimistic about sustained momentum. Saket Mohta, MD of Merlin Group, predicts that 2026 will witness new growth dynamics, with private equity and Real Estate Investment Trusts (REITs) playing a significantly larger role. He anticipates strengthened growth across housing, commercial, and alternative asset classes.
Echoing this positive sentiment, Siddharth Pansari, former president of Credai Bengal and director of Primarc Group, highlighted the growing interest of funds and institutional investors in Bengal. Citing the South City deal as a prime example, he revealed talks of institutional funds taking over another shopping mall and a large IT complex. "I think this is just the start, and this ecosystem is bound to grow in Bengal," Pansari added, suggesting that Kolkata's 400% surge may be a precursor to a longer-term investment trend in the region.
