India witnessed a significant surge in institutional real estate investment activity, reaching $1.6 billion in the first quarter of 2026, reflecting a 26% year-on-year increase. Domestic investors led the inflows, constituting 76% of the total, surpassing foreign investments for the third consecutive quarter.
The report by Cushman & Wakefield highlighted a notable shift as domestic institutional capital exceeded foreign inflows, with a 52% quarterly moderation in overall institutional activity. Over the past three quarters, domestic investors have consistently dominated institutional investment, increasing their share from 63% in Q3 2025 to 81% in Q4 2025, maintaining a high of 76% in Q1 2026.
In Q1 2026, the Indian real estate sector recorded its highest first-quarter deployment since 2021 in institutional investment activity. Private equity dominated the inflows, accounting for 74%, while Real Estate Investment Trusts (REITs) made up the remaining 26%.
The office segment attracted the most significant share of capital, with $1 billion in investments, representing 64% of the quarter’s total. Following closely were the hospitality sector at 13% and residential at 9%, emphasizing the continued preference for commercial real estate in institutional portfolios.
Delhi-NCR emerged as a key investment destination, drawing 28% of Q1 investments, with Chennai and Bengaluru attracting 17% and 14%, respectively. The sustained dominance of domestic capital reflects growing market confidence and a more structured approach to deployment, according to Somy Thomas, Executive Managing Director-Capital Markets at Cushman & Wakefield.
Domestic investors have shown particular interest in the office segment, driven by factors such as increased leasing, occupancy, and income visibility, with the report forecasting a further uptick in momentum.
