Hyderabad: Institutional investment in Hyderabad fell 53 per cent quarter-over-quarter and 15 per cent year-on-year, according to a recent report by investment management firm Colliers India. However, the long-term growth potential of Hyderabad’s real estate is still strong, say experts.

According to the report, foreign investments in Indian real estate decreased by 39 per cent in the first half (H1) of 2025, totalling $1.6 billion. In contrast, domestic capital rose 53 per cent, reaching $1.4 billion.

Total investments during H1 of 2025 were led by select deals in office assets. Bengaluru attracted $0.5 billion investments during H1 of 2025, contributing nearly 17 per cent to the total inflows. Office and residential assets together made up 57 per cent of the city’s investment share. A large deal in retail segment in Kolkata, resulted in 13 per cent share in total investments by the city during H1 of 2025.

Speaking to The Hans India, Vimal Nadar, National Director & Head of Research, Colliers India, said: “Even though Hyderabad witnessed a 51 per cent year-on-year dip in investment inflows during Q2 of 2025, the city’s real estate sector continues to demonstrate strong fundamentals and long-term growth potential—particularly in the office segment.”

“The city attracted $0.3 billion in investments in H1 of 2025, nearly double the inflow recorded in entire 2023, backed by select asset-level deal in the first quarter of the year. This momentum builds on a robust 2024, when capital inflows surged 2.4X times on an annual basis, with over 90 per cent of the inflows directed towards office segment,” he said.

The residential segment has also seen substantial investment activity since 2024. Despite witnessing fewer deal closures in Q2 of 2025, the outlook for Hyderabad’s realty sector is optimistic. Driven by strong occupier demand, sustained investor confidence and ongoing infrastructure upgrades, it is expected to witness a robust supply of 30–35 million sft in Grade A office space in 3–4 years.

The investors are also increasingly diversifying their portfolios beyond core assets—office, residential, industrial and warehousing, and focusing on alternative assets such as data centres. They are targeting portfolio-level or platform deals that include assets across multiple geographies including Hyderabad.