While foreign investments dominated investment activities, their share declined from 71% in Q2 2024 to 66% in Q2 2025.
Credit: DH PHOTO/PUSHKAR V
Bengaluru: Amidst global trade disruptions and geopolitical tensions, the Indian real estate sector witnessed a sharp 42 per cent decline in institutional investments during the second quarter ended June 2025 at Rs 15,464 crore ($1.80 billion). Commercial assets continued to be the primary focus for institutional investors, according to Vestian, a workplace solutions firm.
While foreign investments dominated investment activities, their share declined from 71 per cent in Q2 2024 to 66 per cent in Q2 2025. In value terms, foreign investments dropped by 46 per cent to Rs 10,224 crore ($1.19 billion) from $2.21 billion in the year ago period.
Investors from the USA, Japan, and Hong Kong contributed around 89 per cent to the foreign investments in the second quarter. About 69 per cent of these investments went into commercial assets and about 11 per cent were invested in residential properties.
Commercial assets attracted 61 per cent of the total investments in Q2 2025, with a 76 per cent yearly rise in value, highlighting strong investor preference for retail, office space, and hospitality assets.
The share of domestic investments slipped to 19 per cent, with a 47 per cent yearly decline in value, highlighting subdued investment activities among local investors. Blackstone’s acquisition of South City Mall reflects a strong institutional appetite for quality retail assets. This was the largest deal of Q2 2025, worth Rs 3,264 crore ($380 million), Vestian said.
In another deal, Kanakia Group formed a Rs 3,032 crore ($353 million) joint venture with global investors, such as Hines, Mitsubishi Estate, and Sumitomo, to develop a 1.5 million sq ft Grade-A office project in Bandra Kurla Complex in Mumbai.
In Bengaluru, Century Group raised Rs 1,847 crore ($215 million) in structured debt from global investors, Ares Asia and SC Lowy, marking one of the largest private real estate funding deals in recent quarters.
Shrinivas Rao, CEO, Vestian said, “While overall inflows remained lower on an annual basis, the substantial quarterly growth reflects renewed investor confidence supported by robust macroeconomic fundamentals and strong inherent demand."