Foreign and Local Co-Investments in Indian Real Estate Soar Sixfold to $727 Million
Despite a decline in direct foreign investment, co-investments between foreign and local players in Indian real estate have surged 6.6 times, reaching $726.58 million in the latest quarter, according to a report by Vestian.
Real EstateCoinvestmentsForeign InvestmentDomestic InvestmentIndiaReal Estate NewsOct 28, 2025
While direct investment from foreign players fell 68 per cent to USD 140.69 million during July-September 2025, from USD 436.47 million in the year-ago period, the co-investment trend highlights a strategic shift. This surge in co-investments underscores the growing confidence of domestic investors in India's real estate market.
Domestic players directly invested USD 892.22 million during July-September 2025, a more than two-fold increase from USD 414.55 million in the year-ago period. Overall, Vestian reported that the total institutional investments in Indian real estate rose 83 per cent to USD 1,759.49 million during the third quarter of the current calendar year, from USD 960.78 million in the year-ago period.
Shrinivas Rao, CEO of Vestian, noted, 'Driven largely by the commercial asset class, institutional investments in Indian real estate have surged by 83 per cent year-on-year, reaffirming the sector's strong resilience amid global headwinds.' Investments in commercial assets, including office, retail, co-working, and hospitality projects, jumped two times to USD 1,397.21 million, from USD 684.47 million.
While foreign investors remain cautious due to global economic pressures and policy uncertainties, the share of foreign investment dropped to an annual low of 8 per cent. Conversely, the share of domestic investments surged to a significant high of 51 per cent. 'Foreign investors, while cautious due to global uncertainty, chose to invest in collaboration with local expertise, boosting the share of co-investments to 41 per cent in July-September 2025 from 15 per cent a quarter earlier,' Vestian's report stated.
Headquartered in Chicago, Vestian has a global presence with offices across the US, India, China, the UK, Sri Lanka, and the Middle East. The company's insights provide a comprehensive view of the evolving real estate landscape in India, highlighting the strategic importance of local partnerships in navigating the current market conditions.
Frequently Asked Questions
What is the current trend in foreign investment in Indian real estate?
The trend shows a significant decline in direct foreign investment, but a substantial increase in co-investments between foreign and local players.
How much did co-investments increase in the latest quarter?
Co-investments increased 6.6 times to USD 726.58 million in the latest September quarter, from USD 109.76 million in the corresponding period of the preceding year.
What is the main reason for the surge in co-investments?
The surge in co-investments is primarily due to foreign investors partnering with local players to mitigate risks amid global uncertainties.
How much did domestic investments increase in the latest quarter?
Domestic investments increased more than two-fold to USD 892.22 million in the latest quarter, from USD 414.55 million in the year-ago period.
What is the role of commercial assets in the growth of real estate investments?
Commercial assets, including office, retail, co-working, and hospitality projects, have seen a significant increase in investments, jumping two times to USD 1,397.21 million from USD 684.47 million.
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