From hedge to conviction: Why global capital is doubling down on India's real assets

The most consequential shifts in institutional investing rarely announce themselves. They emerge gradually, through revised mandates, changed allocation priorities, and a broader redefinition of what institutions consider core holdings. Over the past two decades, that is what has happened with real assets. Not triggered by a single event but shaped by accumulated experience with what these assets actually deliver and what traditional portfolios do not.

When the 2008 crisis hit, equities and bonds fell together, and the diversification institutions had relied on proved far more fragile than assumed. The answer that followed pointed toward productive, income-generating real assets. Not because they were fashionable, but because they held.

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Global alternatives AUM is on a trajectory to reach $32 trillion by the end of this decade. For pension funds, sovereign wealth vehicles, and large asset managers managing long-dated liabilities, they have become a necessary one, spanning real assets, private credit, and structured capital vehicles that offer the duration and income stability that a listed-only portfolio struggles to provide consistently.

FROM OPPORTUNISTIC TO STRUCTURAL

Institutional capital moved into real assets opportunistically through much of the post-2008 decade.

Distressed pricing, the withdrawal of bank lending, and a low-rate environment pushed investors toward alternatives. What has changed since is not the volume of capital but the intent behind it.

Indian real estate attracted $10.4 billion in institutional investment across 77 transactions in 2025, the highest annual inflow ever recorded and 17 percent above an already exceptional 2024. The year marked the second consecutive record, but the more significant signal was in the composition of that capital. Close to 65 percent of office investments went to core, income-generating assets.

Institutions are not chasing appreciation cycles. They are building annuity-style returns that map onto long-dated liabilities. REITs and InvITs contributed $2.5 billion, representing 56 percent of core asset acquisitions.

Domestic institutional investors captured a 52 percent market share, the first time since 2014 that domestic capital has led this market. That is a reliable indicator that the investment thesis has moved from speculative to conviction.

INDIA AS A CAPITAL DESTINATION 

Against this backdrop, India has emerged as a primary destination for global institutional capital in real assets. The reasons are structural rather than cyclical: a large and young workforce, a services economy that has grown consistently for two decades, and a commercial real estate market setting successive records at a moment when comparable markets are under pressure.

What distinguishes India's current cycle from prior ones is the nature of the demand driving it. GCCs accounted for 39 percent of total office absorption in 2025, leasing approximately 32.8 million square feet across major cities. These are not cost-arbitrage operations. They are the R&D, product development, and AI-driven functions of the world's most demanding global enterprises.

When corporations embed capabilities of that complexity and strategic importance into a market, the office infrastructure housing them stops being discretionary real estate. It becomes foundational to how those businesses operate. 

India's policy framework has enabled this capital formation at scale. The maturation of REITs and InvITs as regulated vehicles for institutional participation, combined with the GCC policy architecture across states, has created the structured access and durable demand anchors that long-duration capital requires.

WHAT INSTITUTIONAL CAPITAL IS ACTUALLY LOOKING FOR

What global institutional investors are looking for in India is not simply exposure to a growing market. They are looking for platforms that integrate across asset classes, absorb capital at scale, and are underpinned by governance frameworks built for long-duration deployment. The distinction between owning good assets and operating an integrated platform is the most important judgment an institution makes in this market.

Enterprise office environments generate the talent density that drives demand for digital infrastructure. Data centres power the operations of the enterprises occupying those offices. Industrial and logistics assets serve the supply chains of the same companies. Each layer makes the others more resilient.

India's data centre market has grown from 350 MW in 2019 to 1.5 GW today, with projections pointing to 4 GW by 2030. For institutional investors, that trajectory represents one of the most significant long-duration real asset opportunities this market has produced.

Good assets alone do not produce institutional outcomes. What determines the quality of returns over a long hold period is the rigour behind the asset: how it was underwritten, how it is governed, and whether the platform managing it is built for decades rather than a single cycle. 

FRAMEWORKS AS THE CONDITION FOR THE OPPORTUNITY

Global capital is no longer debating whether India belongs in a real assets allocation. Two consecutive years of record institutional investment have settled that question. What is being evaluated now is whether the platforms operating in this market are built to the standard that long-duration institutional capital requires.

India has made meaningful progress on the policy foundations that enable this. REITs and InvITs have created structured, regulated access for global capital at scale. The GCC policy architecture across states has produced durable, long-term demand anchors in India's most productive cities. The data centre regulatory framework is developing in the right direction. These are not small achievements. They are the institutional infrastructure that serious capital markets are built on.

What the next chapter requires is the private sector meeting that foundation with equivalent rigour: disciplined governance, consistent underwriting, and a long-duration ownership orientation embedded in how platforms are built and managed, not adopted when global partners arrive. India has the fundamentals and the policy architecture to support a real assets market of genuine global standing. The platforms that are built to that standard will not just attract global capital. They will define what Indian real assets become.

(Raj Menda is the Chair of the Supervisory Board at RMZ )