Indian real estate kicked off 2025 on a high note, attracting $1.3 billion in institutional investments in Q1 — a 31% year-on-year jump. This surge, led by a sharp rise in domestic capital, highlights growing confidence in the sector’s core segments: office, residential, and industrial & warehousing.

Domestic investors accounted for 60% of the total inflows, with $800 million pouring in — a 75% increase from last year. These funds were primarily channelled into office and industrial assets, underscoring local investors’ preference for stable, income-generating properties. “This growth highlights the resilience of Indian real estate and the untapped opportunities it presents,” said Badal Yagnik, CEO of Colliers India.

The office sector alone drew $434.2 million, one-third of total Q1 investments. However, this segment faced a 23% year-on-year dip and a 47% decline compared to the previous quarter. Despite this, Hyderabad led the way, attracting over half of all office inflows.

The residential sector emerged as a standout performer, with investments soaring 195% year-on-year to $302.9 million. Foreign investors led the charge, participating in large-scale joint ventures with local developers. “Sustained growth in residential prices, rising demand for luxury housing, and ongoing infrastructure developments will continue to boost institutional investments,” noted Vimal Nadar, Senior Director at Colliers India.

Industrial and warehousing assets maintained strong momentum, raking in $307.7 million — up 73% from Q1 2024. Although this marked a 58% decline from the previous quarter, investor sentiment remained high, buoyed by robust macroeconomic indicators like India’s Manufacturing PMI, which hit a strong 58.1 in March.

Alternative assets continued to gain traction, with inflows rising to $71 million — a 238% jump year-on-year. Data centres, particularly a proposed hyperscale facility in Mumbai, drew the bulk of this capital. Mixed-use developments also posted impressive growth, with a 46% year-on-year and 126% quarter-on-quarter increase, totalling $191.1 million.

City-wise, Mumbai led with $300 million inflows, representing 22% of the nationwide total. Bengaluru and Hyderabad followed with 20% and 18%, respectively. Mixed-use projects dominated Mumbai’s investment landscape, while residential assets drove over half of Bengaluru’s total.

Looking ahead, experts predict the momentum will continue. A favourable policy environment, expected rate cuts, and strong business sentiment will likely keep capital flowing into core and emerging asset classes through the rest of 2025.