Adobe StockMarket Radar India: Property Boom Defies USD 17 Billion Foreign Equity Sell-Off
Record logistics and office demand meets a corporate profit crunch, as domestic liquidity keeps highly-valued markets afloat
October 21, 2025Real Estate
Written by Jorge Aguinaga
Key Takeaways
This sentiment is fuelled by significant headwinds, including punitive 50% tariffs from the US, a clampdown on H-1B work visas, and India's relatively limited representation in the high-growth artificial intelligence (AI) sector.
In response to US trade pressure, India is forging new alliances - including currently being in talks with Brazil to triple their USD 12 billion trade partnership to skirt tariffs.
Despite the massive foreign capital outflow, Indian stocks are described as highly-valued. The Nifty 50 trades at 20 times its 12-month forward estimated earnings, an exuberance supported by a "glut of domestic money" as local investors chase stocks.
Favourable macroeconomic conditions, including stable repo rates and recent GST (Goods and services tax) reforms, are boosting buyer confidence. Many families now view real estate as a safer long-term investment compared to volatile gold and equity markets.
In the luxury segment, buyers are increasingly prioritising "experiences" - such as curated interiors and wellness amenities - over simple price discounts.
While short-term foreign investors may be exiting equities, long-term global players are doubling down. As Bloomberg reports, Citadel Securities, for instance, sees India as a key growth driver for the next decade and is actively mulling an entry into the country's commodity markets.
Key Takeaways
- A major market disconnect is underway, as a USD 17 billion foreign equity sell-off contrasts sharply with record-breaking strength in India's real estate sector.
- The property boom is widespread, with industrial and logistics leasing hitting an all-time high while the Grade-A office market is projected to lead the entire Asia-Pacific region in supply by 2026.
- Despite the foreign exit, high stock valuations are being sustained by a "glut of domestic money," as local investors continue to buy into the market.
The Macro View
As Bloomberg reports, India's market is presenting a sharp contradiction. On one hand, the country has shifted from the "best-loved" emerging market to the "most-sold". Foreign investors are bracing for disappointing corporate earnings, having already pulled nearly USD 17 billion from the nation's equities this year.This sentiment is fuelled by significant headwinds, including punitive 50% tariffs from the US, a clampdown on H-1B work visas, and India's relatively limited representation in the high-growth artificial intelligence (AI) sector.
In response to US trade pressure, India is forging new alliances - including currently being in talks with Brazil to triple their USD 12 billion trade partnership to skirt tariffs.
Despite the massive foreign capital outflow, Indian stocks are described as highly-valued. The Nifty 50 trades at 20 times its 12-month forward estimated earnings, an exuberance supported by a "glut of domestic money" as local investors chase stocks.
Trend Spotlight
In stark contrast to the global market uncertainty, India's "real" economy - specifically real estate - is demonstrating record-breaking strength.- Industrial & Logistics (I&L): Leasing in the I&L sector hit an all-time high in the first nine months of 2025, according to real estate consultancy CBRE. Activity surged 28% year-on-year to 37 million square feet across the top eight cities.
Delhi-NCR dominated this demand, accounting for 11.7 million square feet, followed by Bangalore at 5.7 million square feet and Hyderabad at 4.6 million square feet. This boom is largely driven by the expansion of third-party logistics (3PL) providers and the accelerated deployment of quick commerce. - Grade-A Office Space: The commercial office outlook is equally robust. India is set to lead the entire Asia-Pacific (APAC) region in office space supply in 2026. According to CBRE forecasts, Bangalore (13.09 million square feet), Hyderabad (9.25 million square feet), and Delhi-NCR (8.98 million square feet) will be the top three cities for net office space addition in APAC, decisively surpassing traditional powerhouses like Shanghai and Beijing. This growth is anchored by sustained demand from Global Capability Centres (GCCs) and developers delivering spaces that meet global standards.
- Residential Market: The residential sector is benefitting from a festive sales push. After stabilising in Q3 2025, the overall sales value rose 14% to INR 1.52 lakh crore, with strong traction in premium segments.
Favourable macroeconomic conditions, including stable repo rates and recent GST (Goods and services tax) reforms, are boosting buyer confidence. Many families now view real estate as a safer long-term investment compared to volatile gold and equity markets.
In the luxury segment, buyers are increasingly prioritising "experiences" - such as curated interiors and wellness amenities - over simple price discounts.
While short-term foreign investors may be exiting equities, long-term global players are doubling down. As Bloomberg reports, Citadel Securities, for instance, sees India as a key growth driver for the next decade and is actively mulling an entry into the country's commodity markets.