Domestic Capital Dominates Indian Real Estate for Third Straight Quarter as First-Quarter Inflows Hit 5-Year High: Cushman & Wakefield
Gurugram, April 28, 2026: Domestic institutional capital has solidified its dominance in India’s real estate sector, outperforming foreign inflows for the third consecutive quarter. According to the Q1 2026 Capital MarketBeat report by Cushman & Wakefield, this sustained trend signals a structural shift in capital deployment, with local investors now anchoring the market’s investment activity.
The report reveals that domestic investors contributed approximately 76% of the total institutional inflows in the first quarter of 2026, amounting to USD 1.2 billion. This follows a period of aggressive growth where the domestic share rose from 63% (USD 1.1 billion) in Q3 2025 to a staggering 81% (USD 2.7 billion) in Q4 2025. While foreign investments totaled USD 0.4 billion this quarter, the consistent depth of local capital is providing a vital buffer against global macroeconomic volatility and geopolitical sensitivities.
Total institutional investment for Q1 2026 reached USD 1.6 billion, marking the highest first-quarter deployment since 2021. While this represents a 26% increase compared to the same period last year, it reflects a 52% decline from the massive peak seen in the previous quarter. Private Equity remained the favored vehicle for these funds, capturing 74% of total inflows, while Real Estate Investment Trusts (REITs) accounted for the remaining 26%.
The office sector remains the primary magnet for institutional capital, attracting USD 1.0 billion—or 64%—of total quarterly investments. The hospitality and residential sectors followed, drawing 13% and 9% of the capital, respectively. Geographically, investment interest was distributed across major metros, with Delhi NCR leading at 28%, followed by Chennai at 17% and Bengaluru at 14%.
Somy Thomas, Executive Managing Director of Capital Markets at Cushman & Wakefield, noted that the trend reflects an “important inflection point” for the industry. Thomas stated, “The sustained dominance of domestic capital marks an important inflection point for India’s real estate investment landscape. What we are seeing is a more structural shift in capital allocation, driven by growing confidence in the underlying fundamentals of the market and a more disciplined, institutional approach to deployment.”
According to Thomas, the move toward real estate is being driven by both the strength of the asset class and a cooling of other investment avenues. “Domestic capital has been particularly active in the office segment, and this momentum is likely to build further, supported by the strong performance of the asset class in terms of leasing, occupancy and income visibility.
At the same time, the consistent performance of REITs has reinforced investor confidence in income-generating real estate, while relatively muted returns in equity markets have prompted a rebalancing of capital towards more stable, yield-driven assets. As a result, real estate is increasingly being viewed as a core allocation within domestic portfolios, and this trend is expected to sustain in the near to medium term,” Thomas added.
