Real Estate Attracts $1.4 bn From Domestic Investors in H1 2025, up 53% YoY: Colliers

Gurgaon, July 3, 2025: After a steady start in the first quarter, institutional investment in real estate witnessed a notable uptick during Q2 2025 reaching $1.7 billion, a 29 per cent rise on a sequential basis. This mopped-up total investment in H1 2025 to $3.0 billion, reinforcing the sector’s resilience amidst ongoing global uncertainties.

Although this marked a 15 per cent decline compared to H1 2024, the investment volume remained above the half-yearly average of about $2.6 billion since 2021, reflecting sustained investor interest.

While foreign investment saw a 39 per cent YoY decline, domestic capital surged by 53 per cent to $1.4 billion, accounting for 48 per cent of the total inflows in H1 2025. The growing share of domestic investment marks an ongoing shift in the capital investment landscape with Indian institutional investors playing a more prominent role in driving real estate activity across core asset classes.

Trends in domestic and foreign investment in Q2 2025 and H1 2025 (USD million)

Source: Colliers

Note: For transactions involving multiple investors, an equal share of all investors has been assumed in cases where specific details are not publicly available. As a result, the data presented is indicative and may not reflect the exact capital contribution by investor type.

“Domestic capital has emerged as a key driver in India’s real estate investments with its share in total investments rising steadily from 16 per cent in 2021 to 34 per cent in 2024. In H1 2025, domestic investment accounted for 48 per cent of the total inflow, surging by 53 per cent compared to H1 2024,” said Badal Yagnik, CEO, Colliers India.

“Their growing dominance has helped cushion the impact of global uncertainties and push total investment to the $3.0 billion mark. Over 60 per cent of domestic investment during H1 2025 was 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.”

Foreign institutional investment dropped 39 per cent YoY in H1 2025 to $1.6 billion as global investors remained cautious amid the evolving macroeconomic scenario, flow of credit and inflationary pressures. Despite the slowdown, foreign capital still accounted for over half of total inflow with growing interest in mixed-use and retail assets. Both these segments together comprised about 55 per cent of foreign investments during H1 2025.

Residential and office assets together attracted over half of the investment in H1 2025. Residential assets saw $0.8 billion of investment, driving 27 per cent of the inflow during H1 2025, followed by office assets at 24 per cent share.

Investment in mixed-use assets also witnessed a significant surge, accounting for more than 20 per cent share in the total inflows during H1 2025, up from 7 per cent share during the corresponding period in 2024. Retail and alternative assets also saw a notable rise in investment inflow, cumulatively accounting for $0.5 billion, led by select large deals in H1 2025.

“The $1.7 billion of investment recorded in Q2 2025 underscores the resilience of India’s real estate sector with both core and emerging segments attracting sustained interest. The residential segment continued its strong run, accounting for 31 per cent of quarterly investment driven by healthy end-user demand, improved affordability and renewed confidence from institutional investors,” said Vimal Nadar, National Director and Head of Research, Colliers India.

“The retail sector is also witnessing a steady revival, backed by rising consumption, rapid urbanisation and evolving consumer lifestyle and spending patterns. With REITs and other institutional players actively scouting for quality retail assets across key markets, investment activity in this segment is expected to gain further traction in the coming quarters.”

Trends in institutional investment inflow (USD million)

Source: Colliers

*Note: Alternate assets include data centres, life sciences, senior housing, holiday homes, student housing, schools, etc.

Investment inflow was limited for retail assets in Q2 2024 and Q1 2025; investment inflow was limited for the industrial and warehousing segment in Q2 2025; investment inflow was limited for alternate assets in Q2 2024

1-Includes investment in mixed-use projects as well as deals involving investment across multiple assets in various locations

The institutional flow of funds includes investment by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs, listed REITs and sovereign wealth funds. The data has been compiled per available information in the public domain.

Mumbai and Bengaluru together drove 39 per cent of the investment inflows in H1 2025. Mumbai drove 22 per cent of the total investment during H1 2025 led by select deals in office assets. Bengaluru attracted $0.5 billion investment during H1 2025, contributing nearly 17 per cent to the total inflows. Office and residential assets together made up 57 per cent of the city’s investment share. Interestingly, a select large deal in retail segment in Kolkata resulted in 13 per cent share in total investment by the city during H1 2025.

City-wise investment inflow in Q2 2025 and H1 2025 (USD million)