Domestic institutional investors continued to dominate India’s real estate market in the first quarter of 2026, accounting for 76% of total inflows, as overall investments rose 26% year-on-year to $1.6 billion, according to a Cushman & Wakefield report.

This marks the third consecutive quarter where domestic capital has outpaced foreign inflows, signalling a structural shift in investment dynamics. Foreign investors contributed $0.4 billion, or 24% of total inflows, reflecting a relatively cautious stance amid global macroeconomic uncertainty.

Domestic investors have now led institutional activity in four of the past five quarters, highlighting a steady rebalancing of capital flows. Their share has climbed from around 63% in Q3 2025 to 81% in Q4 2025, before moderating slightly in the latest quarter.

Office segment anchors investment activity

Asset-wise, the office segment remained the dominant investment destination, attracting $1.0 billion, or 64% of total inflows in Q1 2026. Strong leasing momentum, stable occupancies, and predictable income streams continue to support investor interest in commercial assets.

The hospitality sector accounted for 13% of investments, followed by the residential segment at 9%, indicating selective diversification beyond core office assets.

In terms of investment channels, private equity contributed 74% of total inflows, while REITs accounted for 26%, underlining continued appetite for both development-led and income-generating assets.

Metro markets see broad-based interest

At the city level, Delhi NCR led with a 28% share of investments, followed by Chennai (17%) and Bengaluru (14%), reflecting sustained institutional interest across major urban centres.

“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,” said Somy Thomas, Executive Managing Director – Capital Markets, Cushman & Wakefield.

“Domestic capital has been particularly active in the office segment, and this momentum is likely to build further, supported by strong leasing, occupancy and income visibility. Real estate is increasingly being viewed as a core allocation within domestic portfolios,” he added.