New Delhi: Institutional investments in the real estate sector during Q1 (January-March) this year reached $0.81 billion, marking a 47 per cent year-on-year increase, reflecting a renewed sense of confidence among investors, according to a report by real estate consultancy firm Vestian.
As investments approach the billion-dollar mark in Q1 2025, the residential sector has emerged as the frontrunner, dominating with 62 per cent of the total share — up from 41 per cent in the same period last year.
In value terms, investments reported an annual increase of 125 per cent, reaching $506.1 Mn in Q1 2025, the report states.
Commercial assets witnessed investments worth $307.2 Mn in Q1 2025, accounting for 38 per cent of the total investments received during the quarter.
While the share declined from 42 per cent in Q1 2024 to 38 per cent in Q1 2025, investments surged by 33 per cent in value terms during the same period.
Interestingly, the industrial and warehousing sector did not record any significant investment in Q1 2025.
However, it is expected to garner investments in the future on the back of the rapidly growing e-commerce sector and a reduction in logistics costs, according to the report.
While domestic investors remained confident about India’s growth story, the participation of foreign investors increased during Q1 2025.
The share of foreign investors jumped from 2 per cent in Q1 2024 to 43 per cent in Q1 2025, fuelled by India’s robust economic growth compared to the major economies of the world, and rapid infrastructure development.
In value terms, foreign investments skyrocketed by 3,054 per cent annually, reaching $346.9 Mn in Q1 2025 from $11 Mn a year earlier, the report states.
On the other hand, domestic investors dominated with 57 per cent share in Q1 2025. However, their share dropped from 98 per cent a year earlier.
In terms of value, domestic investments stood at $466.4 Mn, registering an annual decline of 14 per cent.
With key deals reaffirming confidence in the real estate sector, institutional investments are expected to maintain an upward trajectory, supported by rapid infrastructure development and economic stability, the report added.
Shrinivas Rao of Vestian said, “Investor confidence in India’s growth story remains strong, with both foreign and domestic players showing increased commitment to long-term investments. This is evident in the growing share of foreign investors, along with the active participation of domestic investors.
"As investment activity continues to build momentum, we can expect a notable increase in future inflows, further reinforcing India's position as a dynamic and attractive investment destination.”
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