Indian Real Estate Sees 52% Drop in Institutional Investments in Q1 2026
Indian real estate saw a significant decline in institutional investments in the first quarter of 2026, with a 52% drop from the preceding quarter to USD 1.6 billion. This decrease is attributed to global factors, including the West Asia conflict, according to a report by Cushman & Wakefield.
The total institutional investment in real estate during January-March 2026 was USD 1.6 billion, marking a 26% increase from the same period in 2025, which stood at USD 1.27 billion. However, it is a substantial decline from the USD 3.35 billion invested in the October-December period of 2025.
Domestic investors played a crucial role in the real estate investment landscape, infusing USD 1.21 billion during the first quarter of 2026. This amount is a significant increase from USD 0.75 billion in the year-ago period and a decrease from USD 2.71 billion in the preceding quarter.
Foreign investments, on the other hand, saw a decline to USD 0.39 billion in the first quarter of 2026. This is a reduction from USD 0.52 billion in January-March 2025 and USD 0.61 billion in October-December 2025.
Cushman & Wakefield highlighted that domestic investors have accounted for a larger share of institutional investments in four of the last five quarters, indicating a sustained rebalancing of capital flows. The consultant noted, 'At a time when foreign capital remains sensitive to global macroeconomic and geopolitical developments, the increasing depth and consistency of domestic capital is helping provide stability and continuity to investment activity.'
Somy Thomas, Executive Managing Director - Capital Markets at Cushman & Wakefield, observed that domestic capital has been particularly active in the office segment. 'This momentum is likely to build further, and the consistent performance of REITs has reinforced investor confidence in income-generating real estate. Additionally, relatively muted returns in equity markets have prompted a rebalancing of capital towards more stable, yield-driven assets,' Thomas added.
At a city level, Delhi-NCR attracted the highest share of the quarterly investment in Q1 2026, accounting for 28%. Chennai and Bengaluru followed closely with 17% and 14% shares, respectively.
Umush Gowda H A, founder and Chairman of Bengaluru-based realty firm Sanjeevini Group, commented on the report, 'The geographical spread of institutional investment, with Bengaluru accounting for nearly 14%, underscores not just the city's strong fundamentals and its position as a preferred destination for long-term capital but the overall resilience of the real estate sector.'
The continued inflow of domestic capital is helping sustain project pipelines, support new developments, and maintain pricing discipline even amid global uncertainties, Gowda added.
Overall, while the decline in institutional investments is a concern, the robust participation of domestic investors and the resilience of key cities like Bengaluru and Delhi-NCR provide a positive outlook for the Indian real estate market.
