India has emerged as the fourth-largest destination in the Asia Pacific (APAC) region for real estate capital inflows during the first half of 2025. Despite a modest 6% year-on-year decline in overall APAC real estate investments, India’s strong foreign and domestic investment activities reflect growing investor confidence and a positive outlook for the year’s second half.
Strong Investment Momentum Despite Regional Slowdown
According to Colliers’ Investment Insights H1 2025 report, real estate investments across nine APAC markets reached USD 71.9 billion, slightly down from the previous year due to global trade volatilities and macroeconomic challenges. However, stabilising interest rates and domestic investments are expected to fuel growth going forward. India climbed three spots from seventh to fourth globally for land and development capital deployment, highlighting its rising appeal among institutional investors.
Foreign and Domestic Capital Dynamics in India
India attracted USD 3.0 billion in capital inflows during H1 2025, with foreign investment strong at USD 1.6 billion, making up 52% of institutional inflows. Domestic capital surged 53% year-on-year, accounting for 48% of total investments, showcasing increased local institutional participation. Residential and office segments led investment activity, with residential assets drawing USD 0.8 billion. Institutional investors are increasingly engaged in partnerships with local developers for early-stage land and construction projects. Mixed-use and retail sectors expanded sharply, surpassing 30% of inflows compared to 7% last year.
Regional Investment Trends and Sustainability Focus
Across APAC, office assets dominated with 36% of total investment volumes, led by demand in South Korea and Japan. Retail investment rebounded particularly in Australia and Mainland China, while industrial and logistics sectors showed varied performance. Sustainability gained prominence, with greener skylines and mixed-use developments integrating residential and entertainment spaces, contributing to market resilience.
The FlexInsights Take
India’s rise to the fourth position in real estate capital inflows within APAC is a testament to its robust economic fundamentals and investor-friendly policies like simplified GST regulations. The surge in domestic capital deployment alongside strong foreign interest signals a maturing market with broad-based growth potential. With positive macroeconomic signals and rising interest in alternative real estate assets such as data centres and life sciences, India is well poised for sustained momentum in the latter half of 2025 and beyond. Investors should monitor the evolving demand in core and emerging segments to align with this growth trajectory.
