Institutional Investments in Indian Real Estate Surge 70% in Q2 2026
Institutional investments in Indian real estate rose 70% year-on-year to USD 2.9 billion in the second quarter of calendar year 2026 (Q2 CY2026), driven by strong domestic and foreign investor participation. Chennai and Bengaluru together contributed approximately 27% of the total inflows, according to a report by Colliers.
Domestic investments more than doubled to USD 1.33 billion during the quarter, accounting for 46% of the total inflows. Foreign investments stood at USD 1.54 billion, contributing 54% of the total despite global trade and capital deployment uncertainties arising from the West Asia crisis. The inflows were supported by select large transactions.
Major Deals and Investor Activity
According to the report, the Abu Dhabi Investment Authority (ADIA) recorded the largest deal of the quarter by investing USD 675 million in Kotak Alternate Asset Managers' mixed-use assets across multiple cities. The Canada Pension Plan Investment Board (CPPIB) followed with a USD 440 million investment in CtrlS in the alternatives segment.
Capital inflows into Indian real estate touched a six-year high during the first half of 2026, supported by rising confidence among domestic investors, continued foreign capital deployment, and increased investments in alternative and mixed-use assets.
Positive Outlook and Economic Growth
Institutional investors remain positive on India's long-term growth prospects, with the International Monetary Fund (IMF) recently raising its GDP growth forecast for FY2027 by 10 basis points to 6.5%.
City-wise, Chennai and Bengaluru together attracted about USD 1.2 billion in investments during January-June 2026, accounting for around 27% of the total inflows. The office segment dominated investments in both cities, with a share of around 85-95%.
Rise of Tier II and III Cities
The report also noted increased capital deployment in Tier II and III cities, particularly in the hospitality, industrial and warehousing, and residential segments. Cities such as Coorg, Hosur, Coimbatore, Kochi, and Ujjain witnessed significant investments during the first half of 2026.
Office Segment Leads, Residential Declines
Overall, the office segment remained the largest investment destination, attracting around USD 1.9 billion and accounting for more than 40% of total inflows during H1 CY2026. However, investments in the residential segment declined 43% year-on-year to USD 0.5 billion during January-June 2026, the report said.
