Real estate attracts $1.3 billion institutional investment in Jan-Mar, up 31% annually: Colliers

Institutional investments in Indian real estate increased 31% in January-March this year to $1.3 billion, driven by a sharp jump in inflows in the residential segment, according to Colliers India.

Real estate consultant Colliers India noted that this growth was primarily driven by domestic investments, which accounted for 60% of the total inflows during the latest March quarter.

"With $0.8 billion inflows, domestic investments saw a 75% annual rise and were largely focused on industrial & warehousing and office segments," it said.

Among various asset classes, the consultant said that fund inflows in the housing segment jumped nearly 3 times to 302.9 million in January-March this year from 102.6 million in the year-ago period.

The institutional investments in office complexes, however, declined 23% to $434.2 million from $563 million.

Inflows in industrial & warehousing assets grew 73% to $307.7 million from $177.7 million.

Mixed-use projects got $191.1 million in January- March 2025, a rise of 46% from $130.8 million in the year-ago period.

Badal Yagnik, Chief Executive Officer of Colliers India, said, "Institutional investors in Indian real estate continue to exhibit confidence. This growth highlights the resilience of Indian real estate and the untapped opportunities it presents."

"Both foreign and domestic investors remained committed towards core assets, with office, residential and industrial & warehousing segments cumulatively accounting for 80% of the institutional investments in Q1 2025," he said.

The momentum is expected to persist through 2025, supported by strong economic growth prospects, robust demand across asset classes and optimistic business sentiment, Yagnik said.

Commenting on the trend, Binitha Dalal, founder & managing partner of Alternate Investment Fund (AIF) Mt K Kapital, said, "The rise in institutional investments reflects India's evolving real estate landscape, with a growing preference for structured vehicles like AIFs that offer professional management, risk diversification, and regulatory clarity."

Institutional investment in such large numbers in the sector re-affirms confidence in returns from the sector as well as a growing market size for investments, she added.

Ankur Jalan, CEO, Golden Growth Fund (GGF), a category II Real Estate focused Alternative Investment Fund (AIF), said, "Despite the global uncertainties, Institutional flows in Indian real estate remain strong, indicating investor confidence in the sector."

With strong growth projected in FY25, inflation declining, and expectations of interest rate cuts going forward, Jalan said the Indian realty market has become extremely attractive for investment for global and domestic institutional investors.

Colliers India said that the institutional flow of funds includes investments by family offices, foreign corporate groups, foreign banks, proprietary books, pension funds, private equity, real estate fund-cum-developers, foreign-funded NBFCs, listed REITs and sovereign wealth funds.

The data has been compiled as per available information in the public domain, it added.