Real Estate: Domestic Institutional Investment Rises 53% To $1.4 Billion In H1 2025 | Real Estate News

Last Updated:July 09, 2025, 17:50 IST

Domestic capital has emerged as a key driver in India’s real estate investments, with its share rising steadily from 16% in 2021 to 34% in 2024, says an expert.

Foreign institutional investments dropped 39% YoY in H1 2025 to $1.6 billion, as global investors remained cautious amidst evolving macroeconomic scenario, flow of credit and inflationary pressures.

Domestic institutional investors have emerged as a major force in India’s real estate sector with $1.4 billion investment in the first half of 2025 as compared to $935 million in the same period last year, a growth of 53%, according to a report by Colliers.

Although the total institutional investment dropped to $3 billion in H1 2025 as compared to $3.5 billion in the same period last year, the investment volume remained above the half-yearly average of about $2.6 billion since 2021, reflecting sustained investor interest.

Badal Yagnik, chief executive officer of Colliers India, said domestic capital has emerged as a key driver in India’s real estate investments, with its share in total investments rising steadily from 16% in 2021 to 34% in 2024. In H1 2025, domestic investments accounted for 48% of the total inflows, surging by 53% compared to H1 2024.

Their growing dominance has helped cushion the impact of global uncertainties and push total investments to the $3.0 billion mark. Over 60% of domestic investments during H1 2025 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.

Ankur Jalan, CEO of Golden Growth Fund, a category-II real estate focussed Alternative Investment Fund (AIF), said the exuberance of foreign institutional investors in India’s real estate sector, owing to geopolitical tensions and weakening rupee, may be ebbing. “The rise in domestic institutional investment in India’s office and housing segments and their growing share will be the key for the real estate sector’s long-term growth and stability.”

The growing share of domestic investments 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.

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

Gurugram-based property consulting firm InfraMantra founder Shiwang Suraj said the domestic institutional investors have been playing a key role in India’s real estate landscape as their share in overall investment has been on the rise.

“This is a good sign considering the fact that domestic investments will help cushion the sector against global uncertainties. The sector is on an upward growth trajectory with strong demand, rising incomes and aspirations and infrastructure push amongst the factors,” Suraj added.

The residential sector saw a 27% rise in institutional investment at $820 million in H1 2025, office sector saw 22% decline at $703 million while alternate assets like data centres, life sciences, senior housing, holiday homes, student housing, schools etc. saw 658% rise to $159 million.

Industrial and warehousing saw 82% decline at $308 million while mix-use projects saw 148% rise at $629 million in H1 2025.

Vijay Harsh Jha, founder and CEO of property brokerage firm VS Realtors, said the rise in institutional investment in the residential segment, close to $820 million in the first half, indicates the long-term positivity for housing demand in the country. Housing sales in the coming quarters may see some uptick.

Mumbai drove 22% of the total investments during H1 2025, led by select deals in office assets. Bengaluru attracted $0.5 billion investments during H1 2025, contributing nearly 17% to the total inflows. Office and residential assets together made up 57% of the city’s investment share.

Mohammad Haris

Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More

Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More

view comments

First Published: