The Indian real estate sector started 2026 on a strong note with total institutional investments reaching USD 1.6 billion in the first quarter. This marks a 25 per cent increase compared to the same period last year. According to the latest report by Colliers India, the market is currently being driven by domestic capital which now makes up three-fourths of the total investment pie.
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Which cities and sectors attracted the most investment?
Delhi NCR and Bengaluru together accounted for 46 per cent of total investments during this period. Delhi-NCR led the charge with USD 0.4 billion while Bengaluru followed with USD 0.3 billion. The office sector remains the most preferred asset class, attracting USD 0.8 billion, which is nearly half of the quarterly inflows. Domestic investors were the primary drivers here, contributing over 90 per cent of the capital for office spaces. The residential segment also showed resilience with a 7 per cent annual growth, attracting USD 0.3 billion.
Why did foreign investments see a decline in Q1 2026?
While domestic capital saw a massive surge, foreign investments experienced a slowdown, dropping to USD 0.4 billion. This represents a 23 per cent annual decline and a significant 75 per cent drop from the previous quarter. Experts attribute this caution to global issues such as the West Asia conflict and uncertainties in the crude and commodity markets.
| Investment Category | Amount (USD) | Year-on-Year Change |
|---|---|---|
| Total Institutional Inflow | 1.6 Billion | 25% Increase |
| Domestic Capital | 1.2 Billion | 57% Increase |
| Foreign Investment | 0.4 Billion | 23% Decline |
| Office Assets | 0.8 Billion | Nearly Doubled |
| Residential Segment | 0.3 Billion | 7% Increase |
Badal Yagnik, CEO of Colliers India, stated that institutional investments remain resilient despite global pressures. He mentioned that the caution from global investors is likely temporary and the Indian market continues to hold a strategic position due to strong internal demand.
