India's Reality sector saw capital inflow of USD 3 billion in H1 2025, down 15% (YoY); H2 to perform better: Colliers

New Delhi [India], September 22 (ANI): India's real estate sector attracted capital inflows worth USD 3 billion in the first half of 2025, marking a 15 per cent year-on-year (YoY) decline, according to Colliers' latest report Investment Insights H1 2025.

However, the report says despite the dip, institutional investor interest in the country remained robust, with both domestic and foreign capital playing significant roles.

"Looking ahead, the second half of 2025 is expected to perform better, supported by stabilizing interest rates, robust domestic investments and increasing diversification in capital allocation within the APAC countries." noted the report

Foreign investments stood at USD 1.6 billion and accounted for 52 per cent of the inflows during the period. Notably, Asia-Pacific (APAC) investors contributed over one-third of these foreign inflows, underlining India's strategic importance in cross-border capital flows. Domestic capital deployment, however, surged by 53 per cent YoY, comprising nearly 48 per cent of the total investments.

"India continues to stand out as a promising country within Asia Pacific's real estate investment landscape." noted Badal Yagnik, Chief Executive Officer, Colliers India.

"With strong demand for high-quality spaces, overhauling & simplification of GST regulations, and anticipation of elevated consumption levels in the upcoming festive season, institutional investors are confident about their India exposure." added Badal

Residential and office assets drove over half of the investments in H1 2025. Residential emerged as the leading segment with USD 0.8 billion inflows, while office assets also gained traction, particularly in developmental projects where global investors are partnering with domestic developers. Retail and mixed-use assets also showed strong momentum, together accounting for more than 30 per cent of India's real estate investments, up from just 7 per cent in the same period last year.

Colliers noted that India ranked fourth globally in land and development capital destinations during H1 2025, up from seventh place in the previous quarter. This underlines the country's growing appeal among global investors, with seven APAC markets featuring in the top 10 destinations worldwide.

"India's prominence in the Asia Pacific region continues to grow, driven by strong demand traction across real estate asset classes. Investor confidence is reflected in its recent rise to fourth place in term sof cross-border capital deployment in land and development sites, up from seventh position in the previous quarter." said Vimal Nadar, National Director & Head of Research, Colliers India.

Nadar added, favorable policies, improving yield spreads, and rising appetite for asset diversification are set to support sustained inflows. The second half of 2025 is poised to perform equally well, with rising investments in core segments like office and residential, along with traction in alternative assets such as data centres, senior living life sciences etc."

The broader APAC market recorded USD 71.9 billion of real estate investments in H1 2025, a 6 per cent YoY decline, amid global economic headwinds. Office assets accounted for 36 per cent of total volumes, while retail investments grew 13 per cent. India and Australia were the standout destinations where offshore capital remained strong, contrasting with domestic-led activity in other APAC markets.

Despite global volatility, Colliers expects capital inflows into India to strengthen in H2 2025, supported by stabilising interest rates, investor confidence in core assets, and growing opportunities in alternative real estate segments. (ANI)

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