India's Real Estate Sector Witnesses 9% Decline in Institutional Investments in 2025
Institutional investments in India’s real estate sector saw a 9% year-on-year decline in 2025, totaling $4.3 billion, according to a report by Colliers. This trend reflects cautious investor behavior amid global tensions and trade conflicts.
Real EstateInstitutional InvestmentColliersDomestic InvestmentForeign InvestmentReal EstateOct 07, 2025
The report stated that the investment decline in 2025 reflects the cautious investor approach amid prevailing global tension, trade conflicts, and other external volatilities. While the 9 per cent YoY dip seems significant, Colliers suggests that this could be due to a large base in 2024 during the same period.
In the last five calendar years, the average institutional investment in the real estate sector has been $4 billion in January and September. The total institutional investment from January to September 2025 was $4.3 billion, the report added.
Badal Yagnik, Chief Executive Officer, Colliers India, says that the current trend reflects continued investor confidence in India’s economic fundamentals and the resilience of the real estate sector.
“With sustained demand across core asset classes and increasing depth of domestic capital, investment momentum is likely to hold steady, even as global headwinds may keep foreign investors cautious in the near-term,” Yagnik added.
The report shows that investment inflows in the real estate sector reflected a balanced mix of domestic and foreign capital. The foreign investments in the sector declined by 36 per cent YoY to $2.1 billion in 2025.
While the foreign investors remain cautious on the Indian real estate market, the domestic institutional investment surged 52 per cent YoY to $2.2 billion, underlining the growing depth of domestic institutional investors in Indian real estate.
Just 4 years ago, foreign investors dominated the Indian real estate market. The Colliers report shows that the foreign institutional investors’ share in the real estate sector was 84 per cent in 2021. The ongoing structural shift underscores the increasing significance of domestic investors.
“Looking ahead, while domestic institutions are expected to remain a steady source of capital, global investors are likely to maintain a cautious stance in the near-term, amid evolving global economic narrative and stricter cross-border capital deployment,” Colliers says.
As per the Colliers data, institutional investment in the office segment increased 27 per cent to $779.9 million during July-September, from $616.3 million in the same period a year earlier.
On the other hand, the investment in the residential segment dipped 17 per cent to $319.7 million in the third quarter of this calendar year, from $384.8 million in the corresponding period of the preceding year.
Frequently Asked Questions
What is the overall trend in institutional investments in India's real estate sector in 2025?
Institutional investments in India’s real estate sector saw a 9% year-on-year decline in 2025, totaling $4.3 billion, according to Colliers.
What factors contributed to the decline in institutional investments in 2025?
The decline in institutional investments in 2025 can be attributed to global tensions, trade conflicts, and other external volatilities, which made investors more cautious.
How has the mix of domestic and foreign investments changed in the real estate sector?
The report shows that foreign investments in the real estate sector declined by 36% YoY to $2.1 billion in 2025, while domestic institutional investment surged by 52% YoY to $2.2 billion.
What is the outlook for future investments in the Indian real estate market?
Domestic institutions are expected to remain a steady source of capital, while global investors are likely to maintain a cautious stance in the near-term due to evolving global economic conditions.
How did the investment in the office segment perform in the third quarter of 2025?
Institutional investment in the office segment increased by 27% to $779.9 million during July-September 2025, compared to $616.3 million in the same period the previous year.
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