Institutional investments in Indian real estate witnessed remarkable growth in the first quarter of 2025, rising 31% year-on-year to USD 1.3 billion, according to a recent report by COLLIERS. This significant uptick signals renewed investor confidence in India's real estate market amidst evolving global economic conditions.
According to the report, commercial office space remained the largest source of investment flows, making up almost 48% of all investments (USD 624 million). Residential investments made up 15% (USD 195 million) of the overall capital inflows, while industrial and warehousing assets came in second with 27% (USD 351 million).
Foreign institutional investors remained the primary capital source, contributing about 72% of the total investments, with investors from Singapore, Canada, and the United States leading the charge. Domestic investors, particularly alternative investment funds and family offices, increased their market participation to 28%, up from 22% in Q1 2024. A noteworthy beneficiary of this investment boom was Delhi NCR, which attracted USD 247 million (19% of total investments), a 45% increase over the previous year. The region's growth trajectory appears promising, driven by several key factors.
The commercial and residential sectors of the Delhi NCR real estate market are undergoing significant change. According to the research, Delhi NCR's Grade A office space absorption is expected to increase by around 18–20% by 2025, with Gurugram and Noida driving this growth. In comparison to other major Indian metropolises, the average rental return in premium commercial buildings is anticipated to be between 7-8%.
In Delhi NCR, the residential market is rebounding, with strong demand for mid- and luxury homes. Affordable housing projects are gaining traction in outlying regions, according to the research, which shows a 24% rise in new launches during Q1 2025 compared to the same time last year.
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According to COLLIERS, the real estate industry in Delhi NCR is expected to keep growing and may draw institutional investments totalling USD 800-900 million by 2025. Favourable government policies, enhanced regulatory frameworks, and the region's strategic significance in India's economic landscape are anticipated to promote this rise.
Mr. Yashank Wason, MD, Royal Green Realty said "India's position as a high-growth real estate industry is further confirmed by the 31% YoY increase in institutional investments to USD 1.3 billion in Q1 2025. Delhi Driven by a thriving residential renaissance along the Dwarka Expressway and high demand for Grade-A workplaces in Gurugram and Noida, NCR has emerged as a clear frontrunner, collecting roughly 30% of these inflows. NCR is positioned to lead investment trends in 2025 as a result of international capital doubling down on commercial assets and infrastructure like the Jewar Airport speeding up peripheral expansion. As institutional investors look for steady, high-yield prospects in India's most active market, we anticipate that this trend will only pick up speed in the luxury housing, logistics sectors, Plotted developments, high street retail, farm houses and so on."
"Institutional investments in Indian real estate surged by 31% in Q1 2025, reaching $1.3 billion—a testament to the sector’s resilience and evolving potential. As global investors place their trust in India's real estate landscape, developers must innovate, adapt, and elevate industry standards. This growth isn't just about capital inflows; it's a sign of confidence in India’s economic trajectory, urban expansion, and infrastructural advancements. For developers, this is more than just a financial milestone—it’s an opportunity to redefine urban living, integrate sustainable practices, and build a future that aligns with global aspirations. The next wave of real estate transformation is here, and those who embrace innovation will shape the skylines of tomorrow. As institutional funding fuels new projects, developers are responsible for ensuring quality, transparency, and long-term value creation said Rahul Singla, Director of Mapsko Group.
As sustainability becomes increasingly important, Delhi NCR is also seeing significant investments in green buildings and ESG-compliant assets, potentially positioning the region as a leader in sustainable real estate development across India.