India’s real estate sector witnessed a strong start to the year, with institutional investments rising to USD 0.81 billion in Q1 2025, marking a 47% year-on-year increase, according to a new report by Vestian Research. Despite global macroeconomic uncertainty, the data reflects solid investor sentiment and a renewed commitment to India’s long-term growth story.
Quarter-wise Institutional Investment Trends
| Quarter | Institutional Investments (USD Bn) | Quarterly Change (%) |
|---|---|---|
| Q1 2024 | 0.55 | -31% |
| Q2 2024 | 3.10 | +464% |
| Q3 2024 | 0.96 | -69% |
| Q4 2024 | 2.22 | +129% |
| Q1 2025 | 0.81 | -63% |
Residential Sector Takes the Lead
The residential sector was the top performer, accounting for 62% of all institutional investments in Q1 2025, up from 41% in Q1 2024. Investment value surged 125% YoY, reaching USD 506.1 million.
| Asset Type | Q1 2025 (USD Mn) | Q1 2024 (USD Mn) | % Share Q1 2025 | % Share Q1 2024 | YoY Change (%) |
|---|---|---|---|---|---|
| Residential | 506.1 | 225.0 | 62% | 41% | +125% |
| Commercial | 307.2 | 231.6 | 38% | 42% | +33% |
| Industrial & Warehousing | Negligible | 58.9 | Negligible | 11% | NA |
| Diversified | Negligible | 36.6 | Negligible | 6% | NA |
| Total | 813.3 | 552.1 | 100% | 100% | +47% |
Foreign Investment Skyrockets Over 3,000%
The biggest story of Q1 2025 is the resurgence of foreign capital. Foreign investors contributed USD 346.9 million, up from just USD 11 million in Q1 2024 — a staggering 3,054% increase. Their share jumped from 2% to 43%, signaling growing international trust in India’s real estate fundamentals.
| Investor Type | Q1 2025 (USD Mn) | Q1 2024 (USD Mn) | % Share Q1 2025 | % Share Q1 2024 | YoY Change (%) |
|---|---|---|---|---|---|
| Foreign | 346.9 | 11.0 | 43% | 2% | +3,054% |
| Domestic | 466.4 | 541.1 | 57% | 98% | -14% |
| Co-investment | Negligible | Negligible | Negligible | Negligible | NA |
| Total | 813.3 | 552.1 | 100% | 100% | +47% |
Expert Commentary
Shrinivas Rao, FRICS, CEO of Vestian, commented:
“Investor confidence in India’s growth story remains strong, with both foreign and domestic players showing increased commitment to long-term investments. As investment activity gains momentum, we anticipate a significant uptick in future inflows, further reinforcing India’s position as a dynamic and attractive investment destination.”
Outlook
Despite a 63% drop in investments compared to Q4 2024, the long-term outlook remains highly optimistic. With rapid infrastructure development, macroeconomic resilience, and rising foreign participation, India’s real estate sector is poised for sustained institutional growth throughout 2025 and beyond.
