NEW DELHI: The Indian real estate sector secured institutional investments totaling $1.80 billion in Q2 2025, marking a 42% decrease year-over-year from the all-time high investments in any quarter. However, compared to the previous quarter, investments surged by 122%.
While foreign investments remained prominent in Q2 2025, their share declined from 71% in Q2 2024 to 66%. In value terms, foreign investments fell by 46%, dropping to $1.19 billion from $2.21 billion.
According to Shrinivas Rao, CEO of the firm, “This growth momentum is expected to persist, with several rating agencies forecasting economic growth exceeding 6% in FY 2026. Additionally, the recent reduction in the repo rate is likely to enhance positive sentiment by lowering borrowing costs and improving credit access for the sector.”
Conversely, co-investments nearly doubled, increasing to 15% from 8%, with a slight 2% rise in value. This shift from direct investments to co-investments indicates foreign investors’ cautious strategy, seeking to mitigate risks amid geopolitical tensions and macroeconomic uncertainties.
Investors from the USA, Japan, and Hong Kong made up approximately 89% of foreign investments in Q2 2025, with 69% focused on commercial assets. Residential properties, on the other hand, received just 11% of total investments, while the remainder was allocated to diversified properties.
Domestic investors represented 19% of the overall investments in Q2 2025, a slight decline from 21% during the same period last year. In terms of value, domestic investments amounted to USD 336 million, reflecting a 47% annual decline and a 28% drop compared to the previous quarter. This downturn is indicative of the cautious sentiment among domestic players amid market volatility driven by geopolitical issues and trade tariffs.
