India real estate investment reached USD 2.1 billion in Q3 2026 as foreign capital regains lead

Institutional investments in India's real estate sector reached USD 2.1 billion during the third quarter of 2026, marking a 12 per cent quarter-on-quarter (QoQ) and 20 per cent year-on-year (YoY) increase. According to a report by Cushman & Wakefield, foreign investors regained the lead after four consecutive quarters of domestic dominance, deploying USD 1.4 billion to account for 68 per cent of total inflows during the period.

Institutional investments in India's real estate sector reached USD 2.1 billion during the third quarter of 2026, marking a 12 per cent quarter-on-quarter (QoQ) and 20 per cent year-on-year (YoY) increase. According to a report by Cushman & Wakefield, foreign investors regained the lead after four consecutive quarters of domestic dominance, deploying USD 1.4 billion to account for 68 per cent of total inflows during the period. Domestic institutions contributed USD 0.7 billion, representing the remaining 32 per cent of the total quarterly deployment. Foreign capital inflows climbed 64 per cent QoQ and surged 134 per cent YoY, driven by renewed global interest.

In contrast, domestic investments contracted 34 per cent on a quarterly basis and 39 per cent on an annual basis, primarily due to a high base of domestic deployment in comparable previous periods. On a year-to-date (YTD) basis, overall institutional investments stood at USD 5.5 billion, registering an 11 per cent expansion YoY. Domestic investors represented 52 per cent of year-to-date volumes with a 15 per cent annual growth, while foreign investors accounted for 48 per cent following an 8 per cent rise.

Asset preferences shifted noticeably toward digital infrastructure during the quarter. The data centre segment took the top spot among asset classes, drawing 52 per cent of all institutional investments. The hospitality segment captured 15 per cent of inflows, while the office segment secured 9 per cent. In terms of route, private equity funds drove 88 per cent of total activity, with Real Estate Investment Trusts (REITS) contributing the remaining 12 per cent. Multi-city transactions constituted 76 per cent of quarterly activity, whereas Mumbai and Delhi-NCR secured 9 per cent and 6 per cent of direct allocations, respectively.

Somy Thomas, Executive Managing Director, Capital Markets, Cushman & Wakefield, noted the sector's resilience amid broader macro headwinds. "While investors remain selective in their deployment strategies, capital continues to gravitate towards opportunities backed by scale and long-term growth potential."

Highlighting the shifting capital sources, he stated that the larger presence of offshore funds points to diverse opportunities across Indian real estate. "The higher share of foreign capital this quarter reflects the attractiveness of India's real estate sector and the breadth of opportunities available across asset classes," Thomas added. "This is also evident in the growing allocation towards data centres, which attracted over half of all institutional investments in Q3 2026, underscoring investors' growing conviction in India's digital infrastructure growth story." (ANI)