Real estate institutional capital flows expected to decline by 37% to $3.06 bn in H1 this year: JLL
Institutional investments in real estate are estimated to decline 37% to $3.06 billion during the first half of this year on global economic uncertainties
Institutional investments in the Indian real estate market are expected to touch $3.06 billion across 30 deals in H1 2025, reflecting a 37% year-on-year decline, according to JLL. Investment transactions are experiencing extended timelines due to the challenging international economic conditions and political uncertainties.
Despite this moderation, the real estate market demonstrates fundamental resilience, it said.
In comparison, the January–June period of 2024 saw investments of $4.89 billion.
Foreign investors' share in total institutional investments in Indian real estate is 68 per cent, while domestic players infused 32 per cent during the first half of the 2025 calendar year.
In the past, the Americas have consistently been the highest contributors to investments. However, since 2023, there has been a significant decline in the share of investments from institutions domiciled in the USA and Canada. H1 2025 witnessed APAC lead with 37% share, the report said.
MMR and Bengaluru attracted almost half of the total investments
Geographically, MMR and Bengaluru collectively attracted 54% of the total real estate investments during the first half of 2025, establishing themselves as the dominant investment destinations in the country.
This slowdown follows an exceptional CY 2024, which saw investments reach a historic peak, marginally surpassing the previous record of $8.4 billion set in 2007, the report said.
Institutional investors continue to participate through public market channels including REITs, QIPs, and investments in listed entities. The standout transaction of 2025 has been Blackstone's significant entry into India's residential real estate sector with approximately $214 million invested to acquire up to 66% of Kolte-Patil Developers, it noted.
“India’s real estate sector remains a compelling investment destination, buoyed by both domestic and international confidence despite global economic uncertainties having presented short-term challenges in the first half of 2025. A robust pipeline of deals exceeding $1 billion points to sustained activity ahead," said Lata Pillai, senior managing director, and Head of Capital Markets, India, JLL.
While foreign institutional capital continues to dominate, domestic institutional participation has surged since 2023, now capturing 32% market share in H1 2025. Foreign Investors continued to take the centre stage accounting for 68% share of investments, the report said.
Residential sector leads with 38% share of total capital flows
“Residential sector leads marginally at 38% share of the total capital flow, marking a notable shift from the historical office sector preference. Within residential investments, equity strategies command 58% of capital flows in H1 2025, (debt instruments accounting for 42%), extending the equity-focused approach that gained momentum in 2024," said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
