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Institutional investments in India’s real estate sector reached USD 4.3 billion in the first nine months of 2025, down 9% compared to the same period last year. The decline reflects cautious investor sentiment amid global uncertainties, trade tensions, and other external market pressures. Despite this, the nine-month inflows remain above the five-year January–September average of USD 4 billion, signalling continued confidence in the fundamentals of the Indian economy and real estate market.
The investment mix in 2025 showed a notable shift. Foreign capital slowed 36% year-on-year to USD 2.1 billion, while domestic institutional investment surged 52% to USD 2.2 billion, highlighting the rising influence of homegrown investors. With foreign investors previously accounting for 84% of capital allocation in 2021, the trend indicates a structural shift toward greater domestic participation. Experts say domestic institutions are expected to remain a steady source of capital, while global investors are likely to stay cautious in the near term due to evolving international economic conditions and tighter cross-border investment norms.
"Institutional investments in Indian real estate touched USD 1.3 billion in Q3 2025, an 11% increase year-on-year. This reflects continued investor confidence in India’s economic fundamentals and resilience of the real estate sector. Domestic capital contributed 60% of the quarterly inflows, with strong interest in office and residential segments. Notably, office assets accounted for over three-fourths of the domestic investments during the quarter, indicating a continued appetite for both ready and developmental commercial properties. With sustained demand across core asset classes and increasing depth of domestic capital, investment momentum is likely to hold steady, even as global headwinds may keep foreign investors cautious in the near-term,” said Badal Yagnik, Chief Executive Officer, Colliers India.
Trends in institutional investment inflows (USD million) –
Quarterly trends also point to recovery. Institutional inflows in Q3 2025 stood at USD 1.3 billion, up 11% from Q3 2024. Domestic investors accounted for 60% of these quarterly inflows, mainly in office and residential segments. Office assets alone made up more than three-fourths of domestic capital in Q3, driven by both ready and under-construction commercial properties.
Segment-wise inflows show a continued appetite for office and residential properties. Office investments reached USD 1.48 billion in the nine-month period, nearly matching last year’s levels, while residential assets saw inflows of USD 1.14 billion, up 11% from 2024. Mixed-use projects, alternate assets such as data centers, senior housing, and retail together accounted for roughly one-third of the total investments.
According to Colliers’ Vimal Nadar, National Director & Head of Research, “After a relatively subdued first half, institutional investments in India’s office segment rebounded strongly in Q3 2025, rising 27% year-on-year to USD 0.8 billion. Office assets accounted for over 60% of total quarterly inflows, led by notable acquisitions of ready commercial properties, particularly in Chennai and Pune. With Grade A space uptake remaining strong backed by stricter implementation of office-first mandates and a robust supply pipeline, the office market continues to offer compelling opportunities for investors in India. Moreover, with institutionalisation of office segment picking pace, investor appetite across established Tier I markets and emerging Tier II destinations is likely to remain unabated.”
Mumbai and Bengaluru Account for One-Third of Real Estate Investments in 2025
Mumbai led the investment charts in 2025, attracting USD 0.8 billion, or 19% of total inflows, driven mainly by office and residential deals. Bengaluru followed closely, drawing USD 0.5 billion, nearly 12% of the overall investment. Other major cities, including Hyderabad, Kolkata, Chennai, Pune, and Delhi NCR, saw more evenly distributed investments, with each recording inflows between USD 0.2–0.4 billion during the first nine months.
Multi-city deals made up over 30% of total investments in 2025, pointing to a broader geographical spread of institutional capital. The trend highlights the rising importance of Tier II cities, contributing to more balanced and inclusive growth in India’s real estate market.
City-wise investment inflows in Q3 2025 and YTD 2025 (in USD million) –
With domestic capital playing a growing role and core asset classes remaining attractive, experts say investment momentum in India’s real estate is likely to remain steady, even as foreign investors maintain a cautious stance amid global uncertainties.
