Domestic Capital Drives 53% Surge in Indian Real Estate Investments in H1 2025

India’s real estate sector witnessed a significant rebound in the first half of 2025, with domestic capital emerging as a powerful growth driver. According to a recent report by Colliers, domestic investments surged by 53 per cent year-on-year to $1.4 billion, accounting for 48 per cent of the total institutional inflows into the sector during the January-June period.

Total institutional investments in Indian real estate reached $3.0 billion in H1 2025, a 29 per cent sequential rise from Q1 to Q2. This performance surpassed the half-yearly average of $2.6 billion recorded since 2021, underscoring the sector’s resilience amid global economic uncertainties.

The report highlights a noteworthy structural shift in the capital investment landscape, as domestic investors continue to strengthen their foothold. “Domestic capital has emerged as a key driver in India’s real estate investments, with its share in total investments rising steadily from 16 per cent in 2021 to 34 per cent in 2024”, said Badal Yagnik, CEO, Colliers India.

Residential and office assets remained the top choices, attracting over 60 per cent of domestic capital. Residential assets alone drew $0.8 billion, contributing 27 per cent to the overall investment inflows, while office spaces accounted for a 24 per cent share. Investments in mixed-use assets also saw a notable increase, commanding over 20 per cent of the total inflows in H1 2025 a sharp rise from 7 per cent during the same period in 2024.

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Retail and alternative assets recorded a combined $0.5 billion in investments, driven by selective large transactions. This uptick signals growing investor interest in diversified real estate opportunities. “With REITs and other institutional players actively scouting for quality retail assets across key markets, investment activity in this segment is expected to gain further traction in the coming quarters”, said Vimal Nadar, National Director and Head of Research, Colliers India.

As domestic capital deepens and diversifies, it is poised to lend greater stability and long-term confidence to India’s maturing real estate ecosystem.