Institutional investments in real estate decline 33% in Q2 CY25: Report

Domestic institutions step up as foreign inflows fall amid evolving macroeconomic scenario, credit flow and inflationary pressures

Institutional investments in Indian real estate declined 33 per cent to $1.7 billion in the second quarter of calendar year 2025 (Q2 CY25) as global investors remained cautious, according to a report by Colliers.

 

Domestic institutions stepped up as their investments rose 32 per cent year-on-year (Y-o-Y) to $642.8 million. Foreign institutional investments declined 49 per cent to $1.04 billion but their share in total inflows was 62 per cent. Investors were cautious amid an evolving macroeconomic scenario, credit flow and inflationary pressures, said the report.

 

Institutional investments in the first half of 2025 stood at $3 billion, down 15 per cent Y-o-Y. As foreign investments declined 39 per cent, domestic capital surged 53 per cent to $1.4 billion to comprise 48 per cent of total inflows in H1 CY25. 

 

“The growing dominance of domestic investments has helped cushion the impact of global uncertainties and push total investments to the $3 billion mark,” said Badal Yagnik, chief executive officer of Colliers India.

 

“Over 60 per cent of domestic investments during H1 CY25 were directed towards residential and office assets, reflecting sustained confidence in core segments. As domestic capital deepens and diversifies, it is poised to bring greater stability and long-term confidence to India’s maturing real estate ecosystem,” he said.

 

Foreign capital slowed down but accounted for over half of total inflows, with growing interest in mixed-use and retail assets. The two segments together comprised about 55 per cent of foreign investments in H1 CY25. 

 

Residential assets saw $0.8 billion investments, driving 27 per cent of the inflows during H1 CY25. Office assets followed, at a 24 per cent share. Investments in mixed-use assets also witnessed a surge, accounting for more than 20 per cent share of the total inflows during H1 CY25, up from 7 per cent share during H1 CY24. Retail and alternative assets, too, saw a rise in investment inflows, cumulatively accounting for $0.5 billion, led by select large deals in H1 CY25, said the report.

 

Mumbai got 22 per cent of total investments in H1 CY25 and Bengaluru attracted $0.5 billion, contributing nearly 17 per cent to the total inflows.