Platform partnerships gain ground in realty

Core Insights - Domestic institutional capital has become the primary driver of real estate investments in 2025, with inflows more than doubling year-on-year to $4.8 billion, accounting for 57% of total investment volume [6][8] Group 1: Investment Trends - Platform-style partnerships between global investors and Indian developers are expected to gain traction, reflecting structural changes in capital flows, governance standards, and risk management within India's real estate sector [3][4] - Domestic alternative investment funds (AIFs) have raised substantial capital, reducing reliance on foreign direct investment (FDI) [6][5] - FDI flows into real estate have moderated, with foreign capital deployment declining by 16% to $3.7 billion in 2025, although there are signs of recovery in cross-border investments [7][8] Group 2: Strategic Shifts - Investors are favoring scalable portfolio strategies over isolated asset-level bets, driven by improved governance, sector consolidation, and regulatory clarity [9][10] - Platforms enable efficient capital deployment, enhance tax efficiency, and provide clearer exit pathways through real estate investment trusts (REITs) [10][11] - Institutional partners are increasingly involved at the land acquisition stage, indicating an evolving risk appetite [14] Group 3: Sector Focus - Office and logistics sectors are leading platform activity due to stable cash flows and REIT potential, while residential projects, especially premium ones, are gaining traction amid strong demand [12][13] - Data centers are emerging as a focus area due to digital and AI growth, with hospitality and alternative assets likely to see more joint ventures [13][12] - Partnerships involving commitments of $1–2 billion for joint portfolio building signal a new phase of structured foreign participation in cities like Bengaluru, Mumbai, and Delhi NCR [15]