Domestic investments surge 57% YoY at USD 1.2 billion, driving 75% of the institutional investments in Q1 2026. Foreign investments however moderate to USD 0.4 billion, a 23% YoY dip.
Indian real estate continues to attract institutional investors, with inflows rising 25% year-on-year (YoY) to USD 1.6 billion in the first quarter of 2026, fuelled by strong domestic investor interest. Domestic capital inflows touched USD 1.2 billion during the quarter, witnessing a strong 57% YoY increase and accounting for three-fourths of the overall investment volumes. Interestingly, despite the QoQ dip in investment volume, overall inflows in Q1 2026 stood 64% higher than the average first-quarter volumes since 2020. This underscores optimism in Indian real estate across asset classes, amid emerging global headwinds.
Although domestic investments surged significantly, foreign investor inflows moderated to USD 0.4 billion, reflecting a 23% decline on an annual basis amidst uncertainties in deployment of global capital. Importantly, global investors may adopt a more measured, wait-and-watch approach in the near-term, potentially impacting inflows over the next few quarters. However, domestic investors are likely to remain firm and offset the potential impact to an extent.
Trends in institutional investment inflows (USD million)
Delhi NCR & Bengaluru cumulatively drive 46% of the inflows
At the city level, Delhi NCR drove over one-fourth of the total quarterly investments, attracting USD 0.4 billion, followed by Bengaluru with inflows of USD 0.3 billion. Together, these two markets contributed 46% of real estate investments in Q1 2026, primarily led by large office transactions in operational assets across both cities. Meanwhile, multi-city investments with close to USD 0.5 billion inflows accounted for almost one-third of the quarterly capital inflows. Hospitality and residential assets collectively accounted for nearly two-thirds of these multi-city investments, reflecting increasing investor appetite for opportunities beyond Tier I cities - spanning multiple markets and across wider range of asset classes.
Office assets drive half of the quarterly inflows followed by residential assets with 20% share
During Q1 2026, institutional investments in office assets remained strong at USD 0.8 billion, accounting for half of the overall quarterly inflows and registering almost twice the levels seen in the corresponding period of last year. Interestingly, domestic investors contributed over 90% of the office-segment inflows, with their investments rising more than threefold compared to the levels seen in Q1 2025. This remarkable increase reflects the growing conviction in India's high-quality and ready-to-occupy office assets, supported by diversified tenant profiles, steady cash flows, and improved visibility on long-term returns.
The residential segment, followed office segment, attracting USD 0.3 billion inflows during Q1 2026 registering a 7% YoY growth and accounting for one-fifth of the total quarterly investments. Meanwhile, capital deployment in hospitality, alternatives and retail segments witnessed a sharp annual increase, largely driven by foreign investments.
Read the full report - Capital inflows in Indian real estate remain firm at USD 1.6 billion in Q1 2026.
India real estate Investment Commercial Real estate investment trends. Office market
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