Institutional investments in India’s real estate sector touched $1.80 billion in the second quarter of 2025, according to real estate consulting firm Vestian. While this marks a sharp 42% decline year-on-year from the highest quarterly inflows recorded so far, the segment rebounded strongly on a sequential basis, posting a robust 122% rise over the preceding quarter.
Foreign capital continued to dominate investment activity, accounting for 66% of the total inflows in Q2 2025. However, its share has slipped from 71% a year earlier. In absolute terms, foreign inflows stood at $1.19 billion, down 46% from $2.21 billion in Q2 2024, but more than tripled from $346.9 million in the previous quarter.
Investors from the United States, Japan, and Hong Kong were the biggest contributors, pouring in $1.06 billion — nearly 89% of the total foreign inflows during the quarter. The combined share of these three countries remained broadly stable compared to the same period last year.
Vestian’s data indicates that investors remain largely focused on commercial assets, which accounted for around 69% of foreign inflows. Residential properties attracted only 11%, with the remainder flowing into diversified segments.
“The notable uptick in co-investments reflects a more cautious approach by global investors who are seeking to spread risks amid persistent geopolitical conflicts and macroeconomic headwinds,” Vestian said in its report. Co-investment’s share nearly doubled to 15% in Q2 from 8% a year earlier, with value rising slightly to $265.7 million.
Domestic institutional investors remained relatively subdued, contributing $336 million in Q2, down 47% year-on-year and 28% quarter-on-quarter. Their share slipped to 19% of the total, compared to 21% during the same quarter last year.
“Domestic players continue to tread carefully due to market uncertainty, trade tariffs, and concerns over global demand,” the report added.
In total, institutional investments during the quarter stood at $1.80 billion compared to $3.12 billion in Q2 2024 and $813 million in Q1 2025. The report noted that foreign inflows via joint ventures involving multiple countries were included in the analysis due to a lack of granular data.
