Institutional investments reached USD 3068 million across 30 deals in H1 2025, reflecting a 37% year-on-year decline. Investment transactions are experiencing extended timelines due to the challenging international economic conditions and political uncertainties. Despite this moderation, the real estate market demonstrates fundamental resilience.
This slowdown follows an exceptional CY 2024, which saw investments reach a historic peak, marginally surpassing the previous record of USD 8.4 billion set in 2007. Institutional investors continue to participate through public market channels including REITs, QIPs, and investments in listed entities. The standout transaction of 2025 has been Blackstone's significant entry into India's residential real estate sector with approximately USD 214 million invested to acquire up to 66% of Kolte-Patil Developers.
“India’s real estate sector remains a compelling investment destination, buoyed by both domestic and international confidence despite global economic uncertainties having presented short-term challenges in the first half of 2025. A robust pipeline of deals exceeding USD 1 billion points to sustained activity ahead. The surge in activity from REITs and institutional players further highlights the maturity and depth of the Indian real estate investment landscape. The real estate market has consistently demonstrated its staying power with annual investments surpassing the USD 5 billion threshold across the previous five years and we anticipate that capital flows for calendar year 2025 will align with these established benchmarks.” said Lata Pillai, Senior Managing Director, and Head of Capital Markets, India, JLL.
While foreign institutional capital continues to dominate, domestic institutional participation has surged remarkably since 2023, now capturing 32% market share in H1 2025. Foreign Investors continued to take the centre stage accounting for 68% share of investments. This increasing foreign investor confidence stems from government reforms enhancing market transparency and accountability. Together, these complementary investment trends signal a maturing Indian real estate market with broadening institutional appeal.
In the past, the Americas have consistently been the highest contributors to investments. However, since 2023, there has been a significant decline in the share of investments from institutions domiciled in the USA and Canada. H1 2025 witnessed APAC lead with 37% share. Geographically, MMR and Bengaluru collectively attracted 54% of the total real estate investments during the first half of 2025, establishing themselves as the dominant investment destinations in the country.
“Residential sector leads marginally at 38% share of the total capital flow, marking a notable shift from the historical office sector preference. Within residential investments, equity strategies command 58% of capital flows in H1 2025, (debt instruments accounting for 42%), extending the equity-focused approach that gained momentum in 2024. This increasing equity commitment signals investor confidence in residential assets' long-term appreciation potential. Also, MMR and Bengaluru lead residential investment activity, jointly capturing 57% of institutional capital flows—a distribution that mirrors broader residential market trends across the country.” said Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
Persistent global economic and political headwinds appear more entrenched than initially predicted. While stabilization remains on the horizon, the unclear timeline has extended investment decision cycles, with several capital deployment determinations likely shifting into 2026.
Despite these challenges, India's economic fundamentals demonstrate remarkable resilience, maintaining the real estate sector's appeal for investors seeking exposure to the country's growth trajectory. The market's ongoing maturation is simultaneously creating compelling opportunities in alternative and emerging asset classes, potentially diversifying investment flows and strengthening the overall market ecosystem.
