Institutional investments in Indian real estate jump 47% YoY in Q1 2025

The first quarter of 2025 received sustained institutional investments in the Indian real estate sector, majorly driven by resilient economic performance and rapid infrastructure developments across the country. Moreover, the participation of foreign investors increased significantly compared to the same period a year ago, along with a major focus on residential assets.

According to a Vestian report, institutional investments surged by 47% in Q1 2025 compared to the same period a year earlier, reaching USD 0.81 Bn. This showcases improved confidence of investors in the Indian real estate sector. However, despite a substantial annual increase, institutional investments fell sharply by 63% in Q1 2025 compared to the previous quarter, owing to a slender slowdown in GDP growth rate, cautious investments amid global macroeconomic uncertainty, and geopolitical friction between major economies of the world.

As investments approach the billion-dollar mark in Q1 2025, the residential sector has emerged as the frontrunner, dominating with 62% of the total share —up from 41% in the same period last year. In value terms, investments reported an annual increase of 125%, reaching USD 506.1 Mn in Q1 2025.

Commercial assets witnessed investments worth USD 307.2 Mn in Q1 2025, accounting for 38% of the total investments received during the quarter. While the share declined from 42% in Q1 2024 to 38% in Q1 2025, investments surged by 33% in value terms during the same period. Interestingly, the industrial & warehousing sector did not record any significant investment in Q1 2025. However, it is expected to garner investments in the future on the back of the rapidly growing e-commerce sector and a reduction in logistics costs.

Source: Vestian Research

While domestic investors remained confident about India’s growth story, the participation of foreign investors increased during Q1 2025. The share of foreign investors jumped from 2% in Q1 2024 to 43% in Q1 2025, fueled by a stabilizing global economy, India’s robust economic growth compared to the major economies of the world, and rapid infrastructure development. In value terms, foreign investments skyrocketed by 3,054% annually, reaching USD 346.9 Mn in Q1 2025 from USD 11 Mn a year earlier.

On the other hand, domestic investors dominated with 57% share in Q1 2025. However, their share dropped from 98% a year earlier. In terms of value, domestic investments stood at USD 466.4 Mn, registering an annual decline of 14%.

Shrinivas Rao, FRICS, CEO, Vestian, said, “Investor confidence in India’s growth story remains strong, with both foreign and domestic players showing increased commitment to long-term investments. This is evident in the growing share of foreign investors, along with the active participation of domestic investors. As investment activity continues to build momentum, we can expect a notable increase in future inflows, further reinforcing India’s position as a dynamic and attractive investment destination.”

With key deals reaffirming confidence in the real estate sector, institutional investments are expected to maintain an upward trajectory, supported by rapid infrastructure development and economic stability.