Capital inflows in Indian real estate hit USD 1.6 billion in Q1 2026, with a 25% YoY rise in institutional investment. A surge in domestic capital to USD 1.2B drove 75% of the total, with Delhi NCR and Bengaluru leading the inflows.
Capital inflows in Indian real estate remain firm at USD 1.6 billion in Q1 2026, with Delhi NCR and Bengaluru accounting for 46 per cent of the inflow, according to Colliers India.
Institutional investment volumes rose by 25 per cent year-on-year, primarily supported by a significant surge in domestic investor interest. While overall investment volumes saw a sequential dip, the quarterly inflows remained 64 per cent higher than the average first-quarter volumes recorded since 2020.
Domestic Investment Surge Drives Market
Domestic capital inflows reached USD 1.2 billion during the quarter, marking a 57 per cent annual increase and driving three-fourths of all institutional investments. This contribution is notably higher than the 20-50 per cent share typically observed over the last five years. Conversely, Colliers noted that foreign investor inflows moderated to USD 0.4 billion, representing a 23 per cent decline on an annual basis. This moderation reflects global uncertainties in capital deployment, leading international investors to adopt a more measured approach in the near term.
"Domestic real estate investments witnessed a strong surge and accounted for three-fourths of the USD 1.6 billion inflows in Q1 2026, notably higher than the typical 20-50% share in the last 4-5 years. While global investors are likely to remain cautious in the near-term on account of volatilities in trade, crude and commodities market, this phase is expected to be transient in nature. India's favourable demographics, consumption-driven economy and investor appetite to expand into both core and alternative assets are likely to keep its unique positioning in the wider APAC region intact," said Badal Yagnik, Chief Executive Officer & Managing Director, Colliers India.
Sector and City-wise Investment Breakdown
Office assets continued to lead capital deployment, accounting for half of the quarterly inflows at USD 0.8 billion. This segment saw nearly twice the investment levels compared to the same period last year, with domestic investors contributing over 90 per cent of the office-specific inflows. The residential sector followed, attracting USD 0.3 billion and representing 20 per cent of the total quarterly volume.
At the city level, Delhi NCR accounted for over one-fourth of the quarterly investments with USD 0.4 billion, followed by Bengaluru with USD 0.3 billion. These markets were largely driven by large-scale office transactions in operational assets. Additionally, multi-city investments reached nearly USD 0.5 billion, with hospitality and residential assets making up two-thirds of these deals as investors sought opportunities beyond Tier I cities.
Capital Diversifies into Alternative Assets
"While office & residential segments continue to remain the front runners of real estate capital deployment in India, other asset classes such as hospitality, alternatives and retail witnessed a remarkable surge in capital inflows, collectively accounting for over 20% of the total investment volumes during Q1 2026. Of the USD 0.35 billion cumulative investments across these three asset classes, foreign capital accounted for a notable 70% share. This reflects diversification of global capital, particularly into alternative assets driven by superior risk-return profiles and long-term demand traction," said Vimal Nadar, National Director & Head of Research, Colliers India. (ANI)
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