Institutional Investments in Indian Real Estate Surge 31% to $1.3 Billion in Q1
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Synopsis
The Indian real estate sector experienced significant institutional investments, reaching $1.3 billion in Q1 2025, reflecting a 31% increase year-on-year. This growth was largely driven by domestic investors, particularly in the industrial, warehousing, and residential segments, with notable contributions from foreign investors as well.
Key Takeaways
- Institutional investments in Q1 2025 reached $1.3 billion.
- 31% year-on-year growth in investments.
- Domestic investments amounted to $0.8 billion.
- Hyderabad attracted over half of office space investments.
- Residential investments saw a significant increase, attracting $0.3 billion.
New Delhi, April 3 (NationPress) Institutional investments in India's real estate sector recorded a robust beginning to 2025, with total inflows hitting $1.3 billion in the initial quarter, according to a recent report released on Thursday.
This represents a 31 percent increase compared to the same timeframe last year, largely fueled by domestic investors, as per the findings from Colliers India.
Domestic investments significantly contributed to this surge, totaling $0.8 billion, marking a remarkable 75 percent growth on a year-on-year (YoY) basis.
These funds were primarily allocated to industrial, warehousing, and office spaces. Notably, the office sector alone drew $0.4 billion, which constitutes one-third of the overall investments.
Hyderabad emerged as a pivotal market in this area, attracting more than half of the office-related investments. The residential sector also experienced impressive growth, with investments nearly tripling compared to Q1 2024.
This segment garnered $0.3 billion, accounting for 23 percent of total investments, a figure that rivals the industrial and warehousing sectors.
Interestingly, foreign investors spearheaded the residential investment boom, contributing over half of the total inflows in this sector.
The industrial and warehousing sector sustained its strong performance from 2024, amassing over $0.3 billion in investments during the first quarter of 2025.
This indicates a 73 percent increase YoY, buoyed by rising investor optimism.
Favorable macroeconomic indicators, such as India's manufacturing purchasing manager’s index (PMI) reaching 58.1 in March 2025 — the highest since mid-2024 — have strengthened confidence in this sector.
The solid demand, increased production, and enhanced business confidence have all played a role in this growth, the report noted.
Mumbai stood out as the leading investment hub, capturing $0.3 billion, or 22 percent of the total inflows in Q1 2025.
Bengaluru followed closely with a 20 percent share, while Hyderabad accounted for 18 percent of the investments, as reported.
In Mumbai, mixed-use assets attracted over half of the total inflows, whereas Bengaluru saw a majority of its investments in the residential sector.
City-specific data revealed a staggering 841 percent increase in investments in Mumbai compared to Q1 2024, while Delhi-NCR also witnessed notable growth with a 145 percent rise.
The report further indicated that Bengaluru experienced a consistent 26 percent increase in investments during the same period.
