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The Indian real estate sector is experiencing a renaissance in 2025, as investor confidence reaches new heights. According to a Savills India report, private equity (PE) investment inflows soared to $748 million (₹64 billion) in the first quarter alone-a remarkable 35% increase compared to the same period last year. This robust growth is not just a number it’s a testament to the sector’s resilience, policy-driven transparency, and the unwavering belief in India’s economic future.
What makes this surge even more significant is the sharp 2.3x sequential growth over the previous quarter. This leap is more than a statistic-it’s a reflection of the renewed faith global and domestic investors have in Indian real estate. The sector’s transformation is being powered by government reforms, such as the implementation of the Real Estate (Regulation and Development) Act (RERA), which has brought about greater transparency and accountability. These changes have created an environment where capital feels secure, and where both risks and rewards are more clearly defined.
Among the various segments, residential real estate has emerged as the clear frontrunner, attracting $380 million (₹33 billion) in Q1 2025. This accounts for a commanding 51% of total PE inflows, making it the most sought-after asset class for investors this quarter. The reasons for this preference are compelling:
Commercial office space remains a magnet for foreign capital, securing 32% of the total PE inflows in Q1 2025. This segment is particularly attractive to international investors, who see India’s tech-driven office markets as stable, lucrative, and poised for long-term growth. Key areas of focus include:
Foreign investors are drawn to these cities for their infrastructure, talent pool, and the promise of stable rental yields.
The lion’s share of private equity activity is concentrated in India’s leading real estate markets:
These Tier-I cities are magnets for investment due to their mature real estate ecosystems, world-class infrastructure, and consistent demand across both residential and commercial segments. Their ability to attract both domestic and foreign capital is a testament to their resilience and growth potential.
Several factors are converging to make India’s real estate sector an investor’s paradise in 2025:
Looking forward, the outlook remains highly positive. Savills anticipates continued momentum in private equity investments as:
However, challenges such as regulatory compliance, land acquisition hurdles, and the need for sustainable development remain. Investors and developers who can navigate these complexities will be best positioned to capitalize on India’s real estate boom.
With $749 million in PE inflows in Q1 2025 and a 35% year-on-year growth, Indian real estate is clearly on an upward trajectory. The sector’s ability to attract both domestic and international capital, especially in residential and commercial segments, speaks to its resilience and untapped potential. As policy support strengthens and infrastructure projects progress, India’s real estate market is set to offer even greater opportunities for investors in the quarters ahead.
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