Domestic Real Estate Investment Soars 53% in H1 2025, Balances Institutional Decline

New Delhi, July 3, 2025 – Domestic capital is playing a critical role in the real estate landscape of the country. The total investment from the Indian institution rose 53% YoY in the first half of 2025, as suggested by a recent Colliers report. Due to greater resilience and stability in real estate funding, domestic capital tends to remain less volatile during periods of global turbulence.

This growth comes despite an overall 15% decline in total institutional investments, which stood at USD 3 billion during the same period.

Key Highlights

• Total Institutional Investment (H1 2025): USD 3 billion (↓15% YoY)
• Domestic Investment: USD 1.4 billion (↑53% YoY)
• Foreign Investment: USD 1.6 billion (↓39% YoY)
• Q2 Inflows: USD 1.7 billion (↑~30% from Q1)
• Top Sectors: Residential (27%), Office (24%), Mixed-Use (20%+)
• Leading Cities: Mumbai (22%), Bengaluru (17%), Kolkata (13%).

Q2 2025 Sees Stronger Momentum

The report highlights that Q2 2025 alone attracted USD 1.7 billion in inflows, representing a nearly 30% increase from Q1 levels. This performance demonstrates resilience in the real estate sector despite ongoing global economic uncertainties.

Domestic Share Soars to 48%

Domestic investors contributed USD 1.4 billion, accounting for 48% of the total inflows in H1. This is a significant leap from just 16% in 2021 and reflects the growing depth and confidence of Indian institutional capital in the real estate ecosystem. As noted by Colliers India CEO Badal Yagnik, this trend is expected to bring “greater stability and long-term confidence” to the sector.

Foreign Investment Slumps, But Still Leads

Foreign institutional investment declined 39% year-over-year to USD 1.6 billion, but still accounted for the majority with a 52% share. Within this, mixed-use and retail assets garnered 55% of foreign inflows, indicating a shift in investor preferences amid macroeconomic uncertainty.

Residential, Office, and Mixed-Use Lead Asset Classes

• Residential assets led the pack, attracting USD 0.8 billion or 27% of total H1 investments.
• Office assets followed closely with 24%.
• Mixed-use projects saw a sharp rise in popularity, jumping from 7% in H1 2024 to over 20% in H1 2025.

City-Wise Breakdown: Mumbai, Bengaluru, and Kolkata Stand Out

Mumbai emerged as the top destination, accounting for 22% of total investments, largely due to robust office deals. Bengaluru followed at 17%, benefiting from balanced inflows across office and residential segments. Kolkata also gained traction with a significant retail transaction, pushing its share to 13%.

Outlook for Retail Segment Strengthens

Colliers noted a steady revival in the retail sector, driven by increasing consumption, urbanisation, and shifting consumer behaviours. The entry of REITs and institutional players into quality retail assets is expected to further accelerate investments in the segment in the upcoming quarters. It is a positive signal for the infrastructure and housing sector as it bolsters investor confidence in long-term commercial and residential assets.

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