Indian Real Estate Sees 33% Dip in Institutional Investments in Q1 FY25

India’s real estate sector witnessed a notable decline in institutional investments during the first quarter of FY25 (April–June), with figures dropping 33% year-on-year. According to a recent report by Colliers India, total institutional inflows stood at $1.69 billion (₹14,365 crore), compared to $2.53 billion (₹21,505 crore) during the same period last year.

This downturn is largely attributed to global geopolitical tensions and economic uncertainties, which have impacted investment sentiment across markets.

Foreign Investment Slumps, Domestic Capital Steps Up

One of the key takeaways from the report is the sharp decline in foreign institutional investments, which plunged to $1.048 billion, almost half of last year’s figures for the same quarter.

In contrast, domestic institutional investors ramped up their contributions, infusing $643 million into the real estate sector in Q1 FY25—a 32% increase from $486 million in Q1 FY24.

‘Domestic Capital Driving Growth’: Colliers CEO

“Domestic capital has emerged as a key growth driver for Indian real estate,” said Badal Yagnik, CEO of Colliers India. He noted a consistent upward trend in the share of domestic institutional investments, which rose from 16% in 2021 to 34% in 2024. This momentum continued into 2025, with domestic investors accounting for 48% of total institutional investments in the first half of the year.

This growing domestic presence has helped cushion the impact of global market volatility, pushing total investments in the real estate sector to approximately $3 billion in the first six months of 2025.

H1 FY25 Snapshot: Mixed Investment Trends

During the January–June 2025 period, overall institutional investments in Indian real estate fell by 15%, from $3.53 billion to $2.998 billion.

• Foreign institutional inflows dropped significantly from $2.594 billion to $1.571 billion
• Domestic institutional investments, however, surged 53%, rising from $933 million to $1.427 billion

Who Are the Institutional Investors?

Institutional investors in the Indian real estate landscape include family offices, foreign corporate groups, international banks, proprietary book investors, pension funds, private equity firms, NBFCs, and listed REITs.