Commercial Real Estate Deals Dominate India’s Market in H1 2025

Commercial Real Estate Takes Center Stage Amid Indian Realty Shift

The landscape of Indian real estate is witnessing a striking transition. In the first half of 2025, commercial assets have surged to the fore, shaping the market in ways unseen in recent years. While the overall transaction value softened by 8%, the flow of institutional capital into rent-yielding assets has ensured that offices, retail, and warehousing now command investors' attention—even as residential and proptech deal activity takes a back seat.

According to the latest Grant Thornton Bharat Real Estate Q2 2025 Dealtracker, the sector logged transactions worth $2.5 billion (approx. ₹20,875 crore) in H1 2025, compared to $2.7 billion the year prior. Paradoxically, deal volume rose from 40 to 45 transactions—evidence of deeper market participation, broader investor confidence, and more diversified activity even amidst overall value moderation.

Commercial Surge: Offices, Retail, Warehousing Lead

Commercial real estate’s share of transaction value soared, touching 62% of Q2’s ₹6,500 crore total—double the share just one quarter ago. Notably, this includes landmark deals such as Blackstone’s $378 million acquisition of South City Mall, Kolkata—the largest private equity deal of the quarter. Q2 alone saw 17 deals totalling $1.3 billion, powered by a revival in IPOs and Qualified Institutional Placements. Office parks, warehouse hubs, and retail portfolios with long-term lease visibility proved to be core magnets for institutional inflows.

Top contributing segments:

• Rent-yielding office assets
• Warehousing/logistics hubs
• Retail centers

Private equity interest remains robust, fueled by a quest for steady returns and income-generating properties. As Shabala Shinde, Partner and Industry Leader at Grant Thornton Bharat, affirms, “Institutional capital continues to flow steadily into commercial platforms, reinforcing the asset class’ resilience”.

Residential, Proptech, and M&A See Muted Action

While commercial flourishes, residential and proptech segments experienced marked slowdowns:

• Residential: Accounted for 23% of Q2’s deal volumes, but only 10% of value—indicating smaller, fragmented transactions in a cooling market.
• Proptech: Contributed 15% of volumes, but a modest 5% of value as ticket sizes and allocation shrank.
• M&A: Totalled only 6 transactions worth USD 195 million—a sharp 45% decline from last year, highlighting a pause in strategic consolidations.

Capital Markets Revive, New Investment Avenues Emerge

The market also saw renewed activity in IPOs, SME REITs, and QIPs. Expectations are high for India’s largest-ever REIT to debut soon, signaling greater institutionalization and enhanced access for retail investors to once-exclusive property assets. With institutional investors—including global pension and sovereign funds—leading the charge, Grade-A offices and logistics parks are becoming top choices for those seeking long-term, stable returns.

Market watchers anticipate that H2 2025 will usher in a mature, innovation-driven investment cycle, even as sector realigns and adapts to global volatility.

Investor Takeaway

As the Indian real estate sector evolves, the growing institutional playbook around commercial assets is ushering in transparency, predictable returns, and expanded opportunities—from listed REITs to private placements.