Institutional investments in India’s real estate sector grew 11 per cent YoY to $1.27 billion in the second quarter of FY26, says a Colliers report. However, the net institutional investment in the first six months of the calendar year 2025 saw a 9 per cent YoY decline.
The report stated that the investment decline in 2025 reflects the cautious investor approach amid prevailing global tension, trade conflicts, and other external volatilities. While the 9 per cent YoY dip seems large, Colliers suggest that this could be due to a large base in 2024 during the same period.
In the last five calendar years, the average institutional investment in the real estate sector has been $4 billion in January and September. The total institutional investment from January to September 2025 was $4.3 billion, the report added.
Badal Yagnik, Chief Executive Officer, Colliers India, says that the current trend reflects continued investor confidence in India’s economic fundamentals and the resilience of the real estate sector.
“With sustained demand across core asset classes and increasing depth of domestic capital, investment momentum is likely to hold steady, even as global headwinds may keep foreign investors cautious in the near-term,” Yagnik added
Domestic vs foreign investment in real estate
The report shows that investment inflows in the real estate sector reflected a balanced mix of domestic and foreign capital. The foreign investments in the sector declined by 36 per cent YoY to $2.1 billion in 2025.
While the foreign investors remain cautious on the Indian real estate market, the domestic institutional investment surged 52 per cent YoY to $2.2 billion, underlining the growing depth of domestic institutional investors in Indian real estate.
Just 4 years ago, foreign investors dominated the Indian real estate market. The Colliers report shows that the foreign institutional investors’ share in the real estate sector was 84 per cent in 2021. The ongoing structural shift underscores the increasing significance of domestic investors.
“Looking ahead, while domestic institutions are expected to remain a steady source of capital, global investors are likely to maintain a cautious stance in the near-term, amid evolving global economic narrative and stricter cross-border capital deployment,” Colliers says.
Investment across verticals
As per the Colliers data, institutional investment in the office segment increased 27 per cent to $779.9 million during July-September, from $616.3 million in the same period a year earlier.
On the other hand, the investment in the residential segment dipped 17 per cent to $319.7 million in the third quarter of this calendar year, from $384.8 million in the corresponding period of the preceding year.