NEW DELHI: Indian real estate sector received institutional investments of $1.80 billion in Q2 2025, registering a 42% yearly decline from the highest-ever investments recorded in any quarter. However, investments more than doubled, recording a sharp 122% growth over the previous quarter.
While foreign investments dominated investment activities in Q2 2025, the share declined from 71% in Q2 2024 to 66% in Q2 2025. In terms of value, foreign investments dropped by 46% to $1.19 billion from $2.21 billion.
Shrinivas Rao, CEO of the company said, “This growth momentum is expected to continue as several rating agencies predict economic growth of more than 6% during FY 2026. Moreover, the recent reduction in the repo rate is expected to bolster positive sentiment by reducing borrowing costs and improving credit access for the sector.”
On the other hand, the share of co-investments almost doubled to 15% from 8%, registering a marginal hike of 2% in terms of value. The shift from direct investments to co-investments by foreign investors’ underscores their cautious approach, driven by a desire to mitigate risks amidst uncertain demand due to geopolitical conflicts and macroeconomic instability.
Investors from the USA, Japan, and Hong Kong contributed around 89% to the foreign investments recorded in Q2 2025. Majority of the investments from these countries, around 69%, were concentrated in commercial assets. Residential properties received only 11% of the total investments, whereas the rest were diverted towards diversified properties.
Domestic investors accounted for 19% of the total investments in Q2 2025, down from 21% in the same period last year. In value terms, domestic investments stood at USD 336 Mn, marking a 47% annual decline and a 28% drop compared to the previous quarter. The decline reflects cautious sentiment among domestic players amid market uncertainty due to geopolitical conflicts and trade tariffs.
