Domestic Investment in Indian Real Estate Soars 53% to $1.4B

New Delhi: In the first half of 2025, India’s real estate sector drew in USD 3 billion in institutional investments, of which nearly half (48%) came from domestic investors, according to recent data from Colliers. Although total inflows saw a 15% year-on-year decline, domestic capital surged by 53% to USD 1.4 billion, acting as a vital cushion against decreasing foreign investments.

Domestic investments, which traditionally took a back seat, have risen significantly from just 16% of total investments in 2021 to nearly half in H1 2025. Conversely, foreign investments fell 39% year-on-year to USD 1.6 billion, influenced by global credit constraints and economic uncertainties.

The sector observed a robust rebound in Q2 2025, with investments climbing 29% compared to Q1, reaching USD 1.7 billion, showcasing renewed investor confidence across residential, office, and retail assets. The residential sector topped inflows in the first half with USD 819.9 million, marking a 27% year-on-year increase, followed by offices with USD 702.8 million, despite a 22% decline from H1 2024.

“The rise of domestic capital has been pivotal in mitigating the effects of global challenges,” stated Badal Yagnik, CEO of the company. “Over 60% of domestic investments in H1 2025 went into residential and office sectors, highlighting sustained confidence in India’s core real estate segments.”

Mumbai and Bengaluru together accounted for 39% of total investment inflows. Mumbai led with a 22% share, reaching USD 656.3 million—a staggering 408% increase from the same period last year. Bengaluru followed with USD 498.8 million, a 15% rise, with residential and office sectors making up 57% of the city’s portion.

Kolkata emerged as an unexpected standout, capturing 13% of total inflows due to a major retail deal worth USD 380 million.

The mixed-use asset class saw a remarkable 148% increase in inflows to USD 628.5 million, indicating a growing interest in integrated developments. Retail and alternative assets also gained momentum, collectively accounting for USD 0.5 billion, driven by prominent transactions in emerging consumption centers.

Investment Inflows by City in Q2 2025 and H1 2025 (in USD million):

“Although foreign capital has seen a year-on-year decrease, the resilience shown by India’s real estate market in Q2 2025 is promising,” remarked Vimal Nadar, head of research. “Strong domestic demand, improved affordability, and robust user demand are fuelling growth in residential and retail sectors. We anticipate REITs and institutional investors will keep seeking quality assets, especially in retail and mixed-use developments.”

While investments in office spaces fell compared to last year, demand remains stable, as corporate occupiers and global capability centers continue to assess long-term opportunities in India. Average deal sizes in H1 2025 also suggest an increasing interest in portfolio-level investments.

This report emphasizes that India’s developing real estate ecosystem is becoming more self-sufficient, with domestic institutions acting as stabilizing elements amidst changing global investment trends.

Join the community of 2M+ industry professionals.

Subscribe to our newsletter for the latest insights & analysis delivered to your inbox.

Get all ETRealty industry updates right on your smartphone!