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Core assets drive USD 1.3 Bn investments in Q1 2025, marking 31% YoY growth
Core assets drive USD 1.3 Bn investments in Q1 2025, marking 31% YoY growth

April 16, 2025

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Domestic investments surged by 75% on an annual basis, driving 60% of the total inflows in Q1 2025. Mumbai followed by Bengaluru attracted majority of the real estate investments in Q1 2025.

 

Institutional investments in Indian real estate have seen a strong start to 2025, with inflows reaching USD 1.3 billion in the first quarter—a 31% year-on-year (YoY) increase. This growth was primarily driven by domestic investments, which accounted for 60% of the total inflows during the quarter. With USD 0.8 billion inflows, domestic investments saw a 75% 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 USD 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% of the total inflows during Q1 2025. 

Trends in institutional investment inflows (USD million) –

 

Residential investments surge in Q1 2025, ~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 USD 0.3 billion inflows, accounted for 23% 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.

In continuation to the growth momentum set in 2024, the Industrial & warehousing segment also saw over USD 0.3 billion of investments in Q1 2025, a notable 73% 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 USD 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% share, Mumbai, with about USD 0.3 billion inflows accounted for 22% of the real estate investments in the country during Q1 2025. Bengaluru and Hyderabad followed closely with 20% and 18% share respectively. While Mixed-use assets accounted for over half of the quarterly inflows in Mumbai, the residential segment drove 55% of real estate investments in Bengaluru during Q1 2025. 


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Colliers India
Sukanya Dasgupta, Head Marketing and Communications - sukanya.dasgupta@colliers.com

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