Driving 89% of Q2 2025 Foreign Inflows
New Delhi: Indian real estate sector received institutional investments of USD 1.80 Bn in Q2 2025, registering a 42% yearly decline from the highest-ever investments recorded in any quarter. However, investments more than doubled, recording a sharp 122% growth over the previous quarter.
While foreign investments dominated investment activities in Q2 2025, the share declined from 71% in Q2 2024 to 66% in Q2 2025. In terms of value, foreign investments dropped by 46% to USD 1.19 Bn from USD 2.21 Bn. On the other hand, the share of co-investments almost doubled to 15% from 8%, registering a marginal hike of 2% in terms of value. The shift from direct investments to co-investments by foreign investors’ underscores their cautious approach, driven by a desire to mitigate risks amidst uncertain demand due to geopolitical conflicts and macroeconomic instability.
Amid global headwinds, investors from the USA, Japan, and Hong Kong contributed around 89% to the foreign investments recorded in Q2 2025. The share remained largely stable compared to the same period a year earlier. Interestingly, majority of the investments from these countries, around 69%, were concentrated in commercial assets. Residential properties received only 11% of the total investments, whereas the rest were diverted towards diversified properties.
| Top 3 countries as per foreign investments in Q2 2025 (USD Mn) | |||||
| Country Names | Q2 2024 | Q1 2025 | Q2 2025 | Y-o-Y (% Change) | Q-o-Q (% Change) |
| USA, Hong Kong, Japan | 1,953.07 | 346.90 | 1,062.50 | -46% | 206% |
| Investor Type | Institutional Investments | % Share | % Change | |||||
| (USD Mn) | ||||||||
| Q2 2024 | Q1 2025 | Q2 2025 | Q2 2024 | Q1 2025 | Q2 2025 | Q2 2025 vs | Q2 2025 vs | |
| Q2 2024 | Q1 2025 | |||||||
| Foreign | 2,218.1 | 346.9 | 1,197.3 | 71% | 43% | 66% | -46% | 245% |
| India-dedicated | 637.9 | 466.4 | 335.7 | 21% | 57% | 19% | -47% | -28% |
| Co-investment | 260.2 | NA | 265.7 | 8% | NA | 15% | 2% | NA |
| Total | 3,116.3 | 813.3 | 1,798.7 | 100% | 100% | 100% | -42% | 122% |
Note: Foreign investments made through a joint venture between multiple countries were also included for the analysis, as a clear bifurcation of investment amounts was not available.
Source: Vestian Research
Domestic investors accounted for 19% of the total investments in Q2 2025, down from 21% in the same period last year. In value terms, domestic investments stood at USD 336 Mn, marking a 47% annual decline and a 28% drop compared to the previous quarter. The decline reflects cautious sentiment among domestic players amid market uncertainty due to geopolitical conflicts and trade tariffs.
| Quarters | Institutional Investments | Quarterly Change |
| (USD Bn) | (%) | |
| Q2 2025 | 1.8 | 122% |
| Q1 2025 | 0.81 | -63% |
| Q4 2024 | 2.22 | 129% |
| Q3 2024 | 0.96 | -69% |
| Q2 2024 | 3.1 | 464% |
Source: Vestian Research
| Asset Type | Institutional Investments | % Share | % Change | |||||
| (USD Mn) | ||||||||
| Q2 2025 | Q1 2025 | Q2 2024 | Q2 2025 | Q1 2025 | Q2 2024 | Q2 2025 vs | Q2 2025 vs | |
| Q2 2024 | Q1 2025 | |||||||
| Commercial | 1,092.10 | 307.18 | 622.3 | 61% | 38% | 20% | 76% | 256% |
| Residential | 377.5 | 506.13 | 732.8 | 21% | 62% | 24% | -48% | -25% |
| Industrial & Warehousing | 32 | NA | 1,500.00 | 2% | NA | 48% | -98% | NA |
| Diversified | 297.1 | NA | 261.2 | 16% | NA | 8% | 14% | NA |
| Total | 1,798.70 | 813.3 | 3,116.30 | 100% | 100% | 100% | -42% | 122% |
Note: Commercial assets include office, retail, co-working, and hospitality projects.
Source: Vestian ResearchShrinivas Rao, FRICS, CEO, Vestian said, “Institutional investments saw a strong recovery in Q2 2025, primarily fueled by a sharp resurgence in commercial real estate activity compared to the previous quarter. While overall inflows remained lower on an annual basis, the substantial quarterly growth reflects renewed investor confidence supported by robust macroeconomic fundamentals and strong inherent demand. This growth momentum is expected to continue as several rating agencies predict economic growth of more than 6% during FY 2026. Moreover, the recent reduction in the repo rate is expected to bolster positive sentiment by reducing borrowing costs and improving credit access for the sector.”
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