India’s Real Estate Sector Sees 47% Jump in Institutional Investments in Q1 2025
India’s real estate market has kicked off 2025 on a high note, with institutional investments reaching $0.81 billion in the first quarter (January–March), a 47% year-on-year increase, according to a new report by real estate consultancy Vestian.
New Delhi: India’s real estate market has kicked off 2025 on a high note, with institutional investments reaching $0.81 billion in the first quarter (January–March), a 47% year-on-year increase, according to a new report by real estate consultancy Vestian. This surge signals growing investor confidence in India’s robust economic trajectory and infrastructure development.
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Residential Real Estate Leads with 62% Share in Q1 2025
The residential real estate sector emerged as the top performer, capturing 62% of total investments in Q1 2025—up significantly from 41% in Q1 2024.
In terms of value, the residential segment recorded $506.1 million, marking a 125% annual rise, showcasing a renewed focus on housing and urban expansion.
Commercial Real Estate Sees 33% Rise Despite Slight Share Dip
The commercial segment attracted $307.2 million in institutional investments in Q1 2025, accounting for 38% of the total. While the share dropped slightly from 42% in Q1 2024, the value of investments rose 33% year-on-year, reflecting strong demand in the office and commercial leasing sectors.
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Industrial and Warehousing Sector Awaits Investment Upswing
Interestingly, no major investments were recorded in the industrial and warehousing sector during the first quarter of 2025. However, experts suggest that rising e-commerce growth and reduced logistics costs will soon attract significant capital into this segment.
Foreign Investors Increase Stakes: From 2% to 43% in a Year
One of the report’s standout findings is the surge in foreign investor participation, which jumped from 2% in Q1 2024 to 43% in Q1 2025. In value terms, foreign investments soared by a staggering 3,054%, reaching $346.9 million—up from just $11 million a year ago. This spike is attributed to India’s economic resilience and infrastructure growth.
Domestic Investors Still Lead but See Reduced Share
While domestic investors retained a 57% share of total investments in Q1 2025, their dominance declined from 98% in Q1 2024. In value terms, domestic investment stood at $466.4 million, showing a 14% annual drop.
This shift highlights the growing interest of international funds in India’s expanding property market.
Expert Outlook: Investment Momentum to Continue
According to Shrinivas Rao, CEO of Vestian, “Investor confidence in India’s growth story remains strong, with both foreign and domestic players showing increased commitment to long-term investments. As investment activity continues to build momentum, we can expect a notable increase in future inflows.”
With key deals and strategic funding reaffirming faith in India’s real estate landscape, the sector is expected to see sustained growth, driven by urbanization, government-backed infrastructure projects, and global investor interest.
