New Delhi [India] July 7 (ANI): The Indian real estate sector received institutional investments of USD 1.80 billion in Q2 2025, an increase of 122 per cent from the previous quarter, from global giants like the U.S., Japan and Hong Kong according to a report by real estate consulting firm Vestian.

The report, however, adds that despite investments more than doubling over the previous quarter, a yearly decline of 42 per cent is registered from the highest-ever investments recorded in any quarter.

Amid global headwinds, investors from the U.S., Japan, and Hong Kong contributed around 89 per cent to the foreign investments recorded in Q2 2025. The majority of the investments from these countries were concentrated in commercial properties. Residential properties received only 11 per cent of the total investments, whereas the rest were diverted towards diversified properties.

However, the share of these countries remained largely stable compared to the same period of the previous year.

The report noted that, while foreign investments dominated investment activities in Q2 2025, its 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 USD 1.19 billion from USD 2.21 billion. However, the share of co-investments almost doubled to 15 per cent from 8 per cent in the previous quarter, registering a hike of 2 per cent in value terms.

The reports added that the shift of investment pattern from direct investments to co-investments by foreign investors underscores their cautious approach, driven by a desire to mitigate risks amidst geopolitical conflicts and macroeconomic instability.

Shrinivas Rao, FRICS, 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. This growth momentum is expected to continue as several rating agencies predict economic growth of more than 6% during FY 2026. Moreover, the recent reduction in the repo rate is expected to bolster positive sentiment by reducing borrowing costs and improving credit access for the sector.'

Investment by domestic investors accounted for nearly 19 per cent of the total investments in Q2 2025, down from 21 per cent in the same period last year.

In value terms, domestic investments stood at USD 336 million, about a 47 per cent annual decline and a 28 per cent decline compared to the previous quarter.

The report says a decline in investments by domestic investors reflects cautious sentiment amid market uncertainty due to geopolitical conflicts and trade uncertainty. (ANI)