Q1 2026 Real Estate Inflows: REITs and Developers Drive $5.1 Billion Investment Surge
India’s real estate sector recorded investment inflows of $5.1 billion in the first quarter of 2026, marking a 72% year-on-year increase, according to the India Market Monitor Q1 2026 – Investments report by CBRE South Asia.
The report highlighted that developers accounted for 42% of the total investments, while Real Estate Investment Trusts (REITs) contributed about 40%. Domestic investors made up nearly 96% of the inflows.
Over 90% of equity investments were directed towards office assets and land acquisitions, with Bengaluru, Mumbai, and Delhi-NCR together accounting for around 65% of the total inflows.
Commenting on the trend, Binitha Dalal, Founder and Managing Partner at Mt. K Kapital, said the inflows reflect confidence in the sector’s long-term fundamentals and highlighted the increasing role of domestic capital and REITs in overall investment activity.
Amrita Gupta, Director at Manglam Group, noted that the share of developer-led investments and the focus on office assets and land acquisitions indicate a forward-looking approach by the industry. She added that there are early signs of interest in developments beyond major metro markets.
Separately, Rajesh Deo, CFO at Nexus Select Trust, outlined how REITs function as an investment structure. He explained that REITs allow investors to hold units in portfolios of income-generating real estate assets and are traded on stock exchanges, offering liquidity compared to physical property.
On taxation, Deo said REITs operate under a pass-through framework, where certain income streams such as interest and rental income are not taxed at the trust level but in the hands of investors. He added that REIT regulations require the distribution of at least 90% of net distributable cash flows to unitholders.
He also noted that taxation of returns depends on the nature of income distributed—dividend, interest, or capital repayment—and that capital gains on REIT units are taxed in line with listed securities, based on the holding period.
