US, Japan, and Hong Kong Dominate Q2 Foreign Real Estate Investments in India
In the second quarter of 2025, India's real estate sector attracted $1.80 billion in institutional investments, with the US, Japan, and Hong Kong contributing nearly 89% of the foreign inflows.
Real EstateForeign InvestmentInstitutional InvestmentsCommercial AssetsIndiaReal Estate NewsJul 07, 2025
Investments in Q2 saw a substantial increase of 122% compared to the previous quarter, as highlighted by the Vestian report. The surge in foreign investments was particularly notable, with a majority of these investments—around 69%—focused on commercial assets. Residential properties received only 11% of the total investments, while the remaining funds were allocated to diversified properties.
The share of co-investments nearly doubled to 15% from 8% in the previous quarter, marking a 2% increase in value terms. This shift from direct to co-investments reflects a cautious approach by foreign investors, driven by a desire to mitigate risks amid geopolitical conflicts and macroeconomic uncertainties.
Shrinivas Rao, FRICS, CEO of Vestian, commented, “Institutional investments experienced a strong recovery in Q2 2025, largely due to a significant resurgence in commercial real estate activity compared to the previous quarter. Although overall inflows were lower on an annual basis, the substantial quarterly growth indicates renewed investor confidence, supported by robust macroeconomic fundamentals and strong inherent demand.”
The positive momentum is expected to continue, with several rating agencies forecasting economic growth of over 6% during the fiscal year 2026. The recent reduction in the repo rate is anticipated to further bolster this sentiment by reducing borrowing costs and improving credit access for the sector.
Domestic investors accounted for 19% of the total investments in Q2 2025, down from 21% in the same period last year. In terms of value, domestic investments amounted to $336 million.
Vestian, a leading real estate investment and advisory firm, provides comprehensive services to both domestic and international investors, helping them navigate the complex Indian real estate market. The company's expertise and market insights are crucial for investors looking to capitalize on the growing opportunities in the sector.
Frequently Asked Questions
What was the total institutional investment in India's real estate sector in Q2 2025?
The total institutional investment in India's real estate sector in Q2 2025 was $1.80 billion.
Which countries contributed the most to foreign investments in Q2 2025?
The US, Japan, and Hong Kong contributed nearly 89% of the foreign investments in Q2 2025.
What percentage of the total investments was allocated to commercial assets?
Approximately 69% of the total investments were allocated to commercial assets.
How did the share of co-investments change in Q2 2025 compared to the previous quarter?
The share of co-investments nearly doubled to 15% from 8% in the previous quarter.
What is the forecasted economic growth for India in the fiscal year 2026?
Several rating agencies predict economic growth of over 6% during the fiscal year 2026.
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