Domestic Real Estate Inflows Touch USD 2.6 Billion As Domestic Investors Drive 57 Percent Of Total Investments In H1 2026: Colliers India
Gurgaon, July 3, 2026: Indian real estate continued to witness strong participation from domestic and foreign investors alike in the second quarter of 2026, with quarterly institutional investments rising 70 percent Year-on-Year to USD 2.9 billion. Even amidst global trade and capital deployment uncertainties stemming from the West Asia crisis, India’s real estate sector has demonstrated resilience and sustained growth momentum. Total institutional investments in the sector touched USD 4.5 billion during the first half of 2026, marking a 50 percent rise compared to the corresponding period of 2025 and hitting a six-year peak for the first half of a calendar year. This strong performance was underpinned by growing confidence among domestic investors, opportunistic deployment of foreign capital, and a surge in investments within alternative and mixed-use assets, backed by the IMF recently raising its GDP forecast for Fiscal Year 2027 by 10 basis points to 6.5 percent, Colliers India said in a press release.
Domestic investors emerged as the primary driver of real estate investments in India during the first half of 2026, with capital deployment rising 80 percent Year-on-Year to USD 2.6 billion and accounting for about 57 percent of the total national inflows. Strong conviction in the long-term prospects of Indian real estate continued to fuel this domestic interest, while foreign investments saw a notable resurgence in the second quarter. Driven by select large deals, foreign capital inflows reached USD 1.9 billion during the first half of 2026, representing a 24 percent Year-on-Year growth that was largely supported by strategic equity-level investments, stake acquisitions, and capital allocation across mixed-use and alternative assets.
“Institutional investments in India’s real estate sector stood at USD 2.9 billion in Q2 2026, witnessing a 70% YoY rise. This growth was led by equally strong participation from domestic as well as foreign investors. Over the past few quarters, domestic investors have expanded their portfolios across asset classes, driving 40-60% of the real estate investments on a consistent basis. Foreign investors, meanwhile, although increasingly selective, are likely to further tap into alternative and mixed-used segments. This balanced interplay of foreign and domestic investors will be crucial in charting the next growth phase of Indian real estate, especially during the times of uncertainty in capital deployment” said Badal Yagnik, CEO & Managing Director, Colliers India.
A sector-wise breakdown shows that the office segment continued to dominate capital deployment during the first half of 2026, attracting around USD 1.9 billion of investments and accounting for over 40 percent of the total capital inflows. Domestic investors primarily drove these office inflows, focusing the majority of their capital on standing assets. Conversely, investments in the residential segment during the first half of 2026 dropped by 43 percent annually to USD 0.5 billion, as residential investors treaded cautiously due to cost pressures and a moderation in housing sales that are beginning to impact project viability, investment decisions, and development timelines.
In contrast to the residential slowdown, inflows in mixed-use assets and alternative segments—such as data centers, life sciences, and senior housing—surged significantly, individually contributing close to one-fifth of the total inflows during the first half of 2026 at around USD 0.8 billion each. Foreign investors drove the majority of the activity in these segments through equity stake purchases, signaling long-term portfolio diversification beyond core real estate. Additionally, the hospitality segment witnessed strong momentum, attracting USD 0.3 billion in inflows during the first half of 2026; though coming from a lower base, this represented a more than three-fold annual rise that was largely led by foreign capital.
“During the second quarter, office assets drove about 37% of the overall capital inflows at USD 1.1 billion followed by mixed-use and alternative segments. Notably, quarterly inflows across all the three segments saw close to or over 4X rise annually. Within the office segment, investors largely preferred operational assets. The recent listing of another office REIT further reinforces the growth momentum in India’s office market, with leading developers actively monetizing operational assets within their portfolios. Moreover, with office leasing anticipated to grow further in the second half of the year, institutional investors are likely to remain upbeat about the segment throughout 2026” said Vimal Nadar, National Director & Head of Research, Colliers India.
Geographically, multi-city deals dominated the investment landscape, commanding a 46 percent share of overall investment inflows during the first half of the year. Among Tier-I cities, Chennai and Bengaluru together saw USD 1.2 billion of real estate investments, cumulatively driving about 27 percent of national inflows during the first half of 2026. Out of the approximately USD 0.6 billion inflows recorded in each of the two cities, the office segment accounted for a dominant 85 to 95 percent share. Notably, Tier-II and Tier-III cities such as Coorg, Hosur, Coimbatore, Kochi, and Ujjain also witnessed significant capital deployment, particularly across the hospitality, industrial, warehousing, and residential segments.
