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The growth was primarily driven by domestic investments, which accounted for 60 per cent of the total inflows during the first quarter of the financial year.
Institutional investments in Indian real estate have seen a strong start to 2025, with inflows reaching $ 1.3 billion in the first quarter--a 31 per cent year-on-year (YoY) increase.
This growth was primarily driven by domestic investments, which accounted for 60 per cent of the total inflows during the quarter.
With $ 0.8 billion inflows, domestic investments saw a 75 per cent annual rise and were largely focused on industrial & warehousing and office segments.
Office segment drove one-third of the institutional inflows during the first quarter of 2025, at $ 0.4 billion worth of investments.
Hyderabad attracted over half of the total inflows in the office segment in Q1 2025.
At the India level, Industrial & warehousing and residential segments too witnessed significant traction, cumulatively accounting for 47 per cent of the total inflows during Q1 2025.
"Institutional investors in Indian real estate continue to exhibit confidence, as investments rose by 31 per cent YoY to $ 1.3 billion in Q1 2025. This growth highlights the resilience of the Indian real estate and the untapped opportunities it presents. Both foreign and domestic investors remained committed towards core assets, with office, residential and industrial & warehousing segments cumulatively accounting for 80 per cent of the institutional investments in Q1 2025.
"The momentum is expected to persist through 2025, supported by strong economic growth prospects, robust demand across asset classes and optimistic business sentiment. Anticipated easing of monetary policy in the near future and proactive government policies are likely to ensure capital deployment in both core and alternative real estate assets throughout the year,” said Badal Yagnik, Chief Executive Officer, Colliers India.
| Trends in institutional investment inflows (USD million) | |||||
| Asset Class | Q1 2024 | Q4 2024 | Q1 2025 | Q1 2025 vs Q1 2024(% YoY Change) | Q1 2025 vs Q4 2024(% QoQ change) |
| Office | 563 | 825.3 | 434.2 | -23% | -47% |
| Residential | 102.6 | 118.2 | 302.9 | 195% | 156% |
| Alternate assets* | 21 | 18.5 | 71 | 238% | 284% |
| Industrial & Warehousing | 177.7 | 735.7 | 307.7 | 73% | -58% |
| Mixed use | 130.8 | 84.4 | 191.1 | 46% | 126% |
| Retail | - | 104.4 | - | *NA | -100% |
| Total | 995.1 | 1886.5 | 1,306.90 | 31% | -31% |
| *Note: Alternate assets include data centers, life sciences, senior housing, holiday homes, student housing, schools etc. | |||||
| Investment inflows were limited for Retail assets in Q1 2024 and Q1 2025 | |||||
| The institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs, listed REITs and sovereign wealth funds. The data has been compiled as per available information in the public domain | |||||
| Source: Colliers | |||||
Residential investments surge in Q1 2025, nearly 3X times compared to Q1 2024
During Q1 2025, institutional investments in the residential segment was almost thrice the inflows in the corresponding period of 2024.
The segment with $ 0.3 billion inflows, accounted for 23 per cent of the total quarterly investments, almost at par with the inflows in industrial & warehousing segment.
Interestingly, foreign investments accounted for over half of the total inflows in residential segment during the quarter, led by select large deals.
"Residential real estate in India has been witnessing strong end user demand in recent years. Institutional investments in the segment grew multi-fold to the tune of $ 0.3 billion during Q1 2025, on an annual basis.
"Amidst evolving capital deployment trends, leading global investors are increasingly partnering with domestic developers, forming joint venture platforms to capitalize on growing opportunities in the residential segment.
"Sustained growth in residential prices, rising demand for luxury housing, and ongoing infrastructure developments will continue to boost institutional investments in residential real estate in the upcoming quarters.
"Concurrently, likely reduction in repo rates can potentially fuel residential demand and thereby investments in mid & affordable housing as well," said Vimal Nadar, Senior Director & Head of Research, Colliers India.
In continuation to the growth momentum set in 2024, the Industrial & warehousing segment also saw over $ 0.3 billion of investments in Q1 2025, a notable 73 per cent YoY increase.
Improved investor confidence is reiterated by strong performance of high frequency macro-economic indicators including Manufacturing Purchasing Manager's Index (PMI) and Index of Industrial Production (IIP).
India's Manufacturing PMI touched 58.1 in March 2025, the highest since mid-2024 indicating strong expansion in the manufacturing sector, driven by robust demand, increased production output, and improved business confidence.
Investments in alternate assets remained healthy at $ 0.07 billion during the quarter.
Amongst alternate assets, data centers particularly witnessed strong traction in Q1 2025, led by capital deployment in a proposed hyperscale data center in Mumbai.
Mumbai followed by Bengaluru attracted majority of the inflows in Q1 2025
While multi-city deals corresponded to an overall 31 per cent share, Mumbai, with about $ 0.3 billion inflows accounted for 22 per cent of the real estate investments in the country during Q1 2025.
Bengaluru and Hyderabad followed closely with 20 per cent and 18 per cent share respectively.
While Mixed-use assets accounted for over half of the quarterly inflows in Mumbai, the residential segment drove 55 per cent of real estate investments in Bengaluru during Q1 2025.'
| City wise investment inflows in Q1 2025 – | ||||
| City | Q1 2024 | Q1 2025 | Investment share in Q1 2025 (%) | Q1 2025 vs Q1 2024 (%YoY change) |
| Bengaluru | 203.2 | 256.5 | 20% | 26% |
| Chennai | 121 | 48.3 | 4% | -60% |
| Delhi NCR | 29.2 | 71.5 | 5% | 145% |
| Hyderabad | 257.9 | 235.2 | 18% | -9% |
| Mumbai | 30.7 | 289.1 | 22% | 841% |
| Pune | 254 | - | *NA | -100% |
| Others/ Multi City | 99.1 | 406.3 | 31% | 310% |
| Total | 995.1 | 1,306.90 | 100% | 31% |
| Source: Colliers | ||||
| Note: *Investment inflows in Pune were limited in Q1 2025 | ||||
Knight Frank says premium housing drove sales in Q1CY25
Primary residential sales in India reached 88,274 units in the first quarter (Q1) (January-March) of calendar year (CY) 2025, rising 2 per cent year-on-year (Y-o-Y) over the Q1CY24, according to Knight Frank India.
While overall sales remained steady, performance varied across key markets.
Five of the top eight Indian cities saw a growth in sales, with Pune and Chennai leading with 20 per cent and 10 per cent Y-o-Y growth in primary unit sales, respectively.
Mumbai remained the largest residential market, recording its highest quarterly sales volume since Q1CY18, reaching 24,930 units – a 5 per cent Y-o-Y rise in Q1CY25.
Cities including the National Capital Region (NCR), Bengaluru, Hyderabad, and Kolkata saw a decline in sales by 1-8 per cent Y-o-Y. Sales in Ahmedabad remained more or less unchanged.
Premium housing (priced ₹1 crore and above) was the key market driver, accounting for 46 per cent of total sales, up from 40 per cent in Q1CY24.
This segment saw a 16 per cent Y-o-Y growth, with 40,432 units sold in Q1CY25.
Ultra-luxury homes (₹50 crore and above) recorded the highest Y-o-Y growth at 483 per cent, increasing from 29 units in Q1CY24 to 169 units in Q1CY25.
In contrast, sales in the sub-₹50 lakh category declined by 9 per cent Y-o-Y.
Supply of new units outpaced demand for the tenth consecutive quarter, with 96,309 units launched in Q1CY25, reflecting a 3 per cent Y-o-Y increase.
Bengaluru saw the highest growth in launches at 26 per cent Y-o-Y. Mumbai and Bengaluru together accounted for 44 per cent of all units launched during the quarter.
As of Q1CY25, the overall inventory in the market will need 5.9 quarters to be sold.
However, the quarters to sell (QTS) level is higher at 7.3 quarters in the ₹50 crore and above segment and significantly elevated at 18.1 quarters in the ₹20-50 crore segment in Q3CY25.
Shishir Baijal, chairman and managing director, Knight Frank India, said, “While some cities, like NCR and Bengaluru, saw a dip in sales due to a significant rise in prices, the top end of the market remains robust. The interplay between developers and homebuyers in this evolving landscape will shape market trends for the remainder of the year.”
Price levels continued a strong run across all markets in Y-o-Y terms. Sequentially, they grew steadily in all markets.
Price levels in Bengaluru and NCR saw exceptional growth at 16 per cent and 12 per cent Y-o-Y as the focus intensified toward the development of premium, high-rise properties. Prices in Mumbai grew by 6 per cent Y-o-Y.
Office segment continues to thrive
On the other hand, India's top eight office markets witnessed an unprecedented surge in transactions, reaching 28.2 million square feet (msf) in Q1CY25 – the highest ever recorded in a single quarter.
This marks a 74 per cent Y-o-Y growth, surpassing the previous peak in Q3CY24 by 48 per cent.
Bengaluru led office market expansion in Q1CY25 by recording 12.7 msf in transactions comprising 45 per cent of the total office space take-up.
The growth was led by space taken up by global capability centres, flex operators, third-party information technology services, and India-facing businesses.
Vacancy levels improved to 14.3 per cent, while rents increased 2-9 per cent across markets.
Feature Presentation: Rajesh Alva/Rediff.com
