Institutional Investments in Indian Real Estate Surge 31% to $1.3 Billion in Q1 2025
Institutional investments in India’s real estate sector have made a strong start in 2025, with total inflows reaching $1.3 billion in the first quarter, reflecting a 31% year-on-year (YoY) growth, according to a recent report by Colliers India.
New Delhi: Institutional investments in India’s real estate sector have made a strong start in 2025, with total inflows reaching $1.3 billion in the first quarter, reflecting a 31% year-on-year (YoY) growth, according to a recent report by Colliers India.
Domestic Investments Drive Growth
Domestic investors played a pivotal role in the surge, contributing $0.8 billion, which marked a 75% rise compared to the same period last year. These investments were primarily channeled into industrial, warehousing, and office space segments. The office space sector alone attracted $0.4 billion, accounting for one-third of total investments.
Hyderabad and Mumbai Lead in Office Investments
Hyderabad emerged as a prominent market for office space investments, drawing over 50% of the total office-related inflows. Meanwhile, Mumbai took the lead in attracting institutional investments, accounting for $0.3 billion (22% of total Q1 2025 inflows). The city also witnessed a massive 841% rise in investments compared to Q1 2024. Mixed-use assets in Mumbai were the primary attraction for investors.
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Residential Sector Sees Significant Growth
The residential sector experienced a remarkable uptick, with investments nearly tripling compared to Q1 2024. The residential segment attracted $0.3 billion, accounting for 23% of the total investments in Q1 2025. Notably, foreign investors led this surge, contributing more than half of the residential inflows.
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Industrial and Warehousing Sectors Maintain Strong Momentum
The industrial and warehousing sectors continued their impressive performance from 2024, attracting over $0.3 billion in Q1 2025, a 73% YoY increase. This growth was fueled by positive macroeconomic indicators, including India’s manufacturing Purchasing Manager’s Index (PMI), which reached 58.1 in March 2025—the highest level since mid-2024.
Key Investment Cities: Bengaluru and Delhi-NCR Show Strong Growth
Bengaluru and Delhi-NCR also saw impressive growth in institutional investments. Bengaluru accounted for 20% of total investments in Q1 2025, with residential assets attracting the most interest. Delhi-NCR experienced a 145% rise in investments, signaling a positive outlook for the region.
Conclusion: Positive Outlook for Indian Real Estate
With an overall increase in institutional investments across key sectors and cities, India’s real estate market remains attractive to both domestic and international investors. The positive macroeconomic environment, coupled with strong growth in industrial, residential, and office segments, signals a promising year ahead for the Indian real estate sector.
Key Highlights:
- Total institutional investments in Q1 2025: $1.3 billion (31% YoY growth)
- Domestic investments contributed $0.8 billion (75% YoY rise)
- Office space sector attracted $0.4 billion (one-third of total investments)
- Residential sector investments saw a significant 3x increase YoY
- Mumbai, Bengaluru, and Hyderabad were key investment destinations
- Industrial and warehousing sectors continued strong performance with a 73% YoY increase
With institutional investors showing confidence in India’s real estate sector, the outlook for the remainder of 2025 remains highly optimistic.
