Domestic investments in Indian real estate surge 53% to $1.4 billion in H1 2025
Domestic capital, long playing a secondary role, has stepped up significantly, growing from just 16% of total investments in 2021 to nearly half in H1 2025. Foreign investments, in contrast, declined 39% year-on-year to USD 1.6 billion, impacted by global credit tightening and macroeconomic uncertainty.
The sector witnessed a strong recovery in Q2 2025, with investments rising 29% over Q1 to USD 1.7 billion, indicating renewed investor confidence across residential, office, and retail assets. Residential real estate led the inflows during the half-year with USD 819.9 million—a 27% year-on-year growth—followed by the office segment with USD 702.8 million, though the latter saw a 22% decline compared to H1 2024.
'The growing influence of domestic capital has helped cushion the impact of global headwinds,' said
Badal Yagnik
, CEO of the company. 'Over 60% of domestic investments in H1 2025 went into residential and office segments, reflecting sustained faith in India's core real estate sectors.'
Mumbai and Bengaluru collectively accounted for 39% of the total investment inflows. Mumbai led with 22% share, clocking USD 656.3 million, a massive 408% jump from the same period last year. Bengaluru followed with USD 498.8 million, a 15% increase, with both residential and office segments comprising 57% of the city's share.
An unexpected highlight came from Kolkata, which captured 13% of total inflows on the back of a significant retail transaction worth USD 380 million.
Meanwhile, the mixed-use asset class saw inflows surge 148% to USD 628.5 million, indicating rising appetite for integrated developments. Retail and alternate assets also gained traction, collectively accounting for USD 0.5 billion, led by marquee deals in emerging consumption hubs.
City wise investment inflows in Q2 2025 and H1 2025 (in USD million):
CityQ2 2024Q2 2025Investment share in Q2 2025 (%)Q2 2025 vs Q2 2024(% YoY Change)H1 2024H1 2025Investment share in H1 2025 (%)H1 2025 vs H1 2024 (%YoY change)Bengaluru228.8242.314%6%432.0498.817%15%Chennai33.0-0%-100%154.148.31%-69%Delhi NCR308.7108.96%-65%337.9180.46%-47%Hyderabad43.021.01%-51%300.9256.28%-15%Kolkata-380.023%*NA-380.013%*NAMumbai98.4367.222%273%129.1656.322%408%Pune4.317.31%299%258.317.31%-93%Others/ Multi City1,817.1554.533%-69%1,916.2960.832%-50%Total2,533.31,691.2100%-33%3,528.52,998.1100%-15%
'Despite a year-on-year dip in foreign capital, the resilience shown by India's real estate market in Q2 2025 is encouraging,' said Vimal Nadar, head of research of the company. 'Strong domestic consumption, improved affordability, and robust end-user demand are driving momentum in residential and retail segments. We also expect REITs and institutional investors to continue scouting for quality assets, particularly in retail and mixed-use spaces.'
While office space investments fell compared to last year, demand remains steady, with corporate occupiers and GCCs continuing to evaluate long-term bets in India. Average deal sizes in H1 2025 also indicated increasing interest in portfolio-level investments.
The report underscores that India's maturing real estate ecosystem is becoming more self-reliant, with domestic institutions emerging as stabilizing forces amid evolving global investment patterns.
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