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V Nagarajan
Indian real estate continued to witness strong participation from domestic and foreign investors alike in Q2 2026, with quarterly investments rising 70 per cent YoY to $2.9 billion.
Even amidst global trade & capital deployment uncertainties stemming from the West Asia crisis, India’s real estate sector has demonstrated resilience and sustained growth momentum. In fact, institutional investments in the sector touched $4.5 billion during H1 2026, marking a 50 per cent rise compared to the corresponding period of 2025, according to Colliers India survey.
Interestingly, in 2026, capital inflows hit a six-year peak for the first half. This strong performance was underpinned by growing confidence of domestic investors, opportunistic deployment of foreign capital and surge in investments within alternative & mixed-use assets. Moreover, institutional investors continue to be invested in India for the long-term, with the IMF recently raising its GDP forecast for FY 2027 by 10 bps to 6.5 per cent.
Domestic investors drove real estate investments in India during H1 2026, with capital deployment rising 80% YoY to $2.6 billion and accounting for about 57% of the total inflows in the first half of the year. Strong conviction in the long-term prospects of Indian real estate continued to drive domestic investor interest.
Meanwhile, foreign investments saw a resurgence, especially in the second quarter, driven by select large deals, taking up foreign capital inflows to $1.9 billion during H1 2026. This 24% YoY growth was largely supported by strategic equity level investments, stake acquisitions and capital allocation across mixed-use and alternative assets.
“Over the past few quarters, domestic investors have expanded their portfolios across asset classes, driving 40-60% of the real estate investments on a consistent basis. Foreign investors, meanwhile, although increasingly selective are likely to further tap into alternative and mixed-used segments. This balanced interplay of foreign and domestic investors will be crucial in charting the next growth phase of Indian real estate, especially during the times of uncertainty in capital deployment” said Badal Yagnik, CEO & Managing Director, Colliers India.
The institutional flow of funds include investments by AIFs, family offices, foreign corporate groups, foreign banks, pension funds, PE, real estate funds & platforms, foreign-funded NBFCs, listed REITs and sovereign wealth funds.
During H1 2026, office segment continued to dominate capital deployment, attracting around $1.9 billion of investments and accounting for over 40% of the total capital inflows. Domestic investors drove inflows in the office segment, majority of which were in standing assets. In case of the residential segment, investments in H1 2026 dropped by 43% annually to $0.5 billion.
Overall, residential investors treaded cautiously as cost pressures and moderation in housing sales are beginning to impact project viability, investment decisions and timelines.
Interestingly, inflows in mixed-use assets and alternatives surged significantly, especially in the Q2. At around $0.8 billion worth of investments each, these segments individually contributed close to one-fifth of the total inflows during H1 2026. Foreign investors drove majority of the activity in these segments largely through equity stake purchases, signalling their long-term intent in portfolio diversification beyond the core real estate segments. Additionally, the hospitality segment also witnessed strong momentum, attracting $0.3 billion inflows during H1 2026.
“The recent listing of another office REIT further reinforces the growth momentum in India’s office market, with leading developers actively monetising operational assets within their portfolios.
Amongst the Tier I cities, Chennai and Bengaluru together saw $1.2 billion of real estate investments, cumulatively driving about 27% of the inflows during H1 2026. Out of the approximately $0.6 billion inflows in each of the two cities, office segment accounted for a dominant 85–95% share during H1 2026.
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