Summary of this article
Institutional investments till H1 2026 stood at $4.5 billion, recording a growth of 50 per cent from H1 2025.
During H1 2026, the office segment continued to dominate capital deployment, attracting around $1.9 billion of investments and accounting for over 40 per cent of the total capital inflows.
Amongst the Tier I cities, Chennai and Bengaluru together saw $1.2 billion of real estate investments, cumulatively driving about 27 per cent of the inflows during H1 2026.
The real estate sector in India saw strong investments worth $2.90 billion from both domestic as well as international investors during Q2 2026, up 70 per cent year-on-year (y-o-y). The sector continued to show growth despite headwinds from the West Asian crisis impacting global trade and capital flows. Institutional investments till H1 2026 stood at $4.50 billion, recording a growth of 50 per cent from H1 2025, according to a report by Colliers India.
Investments into real estate saw the highest capital inflows in six years during the first half. Factors, such as returning sentiment of domestic investors, opportunistic deployment of foreign capital, and a spike in investments across alternative and mixed-use assets categories played a key role in driving investments this year. Institutional investors are also continuing to show signs of long-term commitment to India with the International Monetary Fund (IMF) recently upgrading India’s gross domestic product (GDP) growth projection for FY 2027 by 10 basis points (bps) to 6.50 per cent.
Domestic investors led India’s real estate investments for H1 2026. Total capital deployment increased by 80 per cent y-o-y in H1 2026 to $2.60 billion. Nearly 57 per cent of all investments recorded till the halfway mark of the year have been by domestic investors. Meanwhile, foreign investments saw a resurgence, especially in the second quarter, driven by select large deals, taking up foreign capital inflows to $1.90 billion during H1 2026. This 24 per cent growth y-o-y was largely supported by strategic equity level investments, stake acquisitions, and capital allocation across mixed-use and alternative assets.
“Institutional investment 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 per cent 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 and Managing Director, Colliers India.
Office Assets Drive Over 40 Per Cent Of Investments In H1 2026
During H1 2026, the office segment continued to dominate capital deployment, attracting around $1.90 billion of investments and accounting for over 40 per cent of the total capital inflows.
Domestic investors drove inflows in the office segment, majority of which were in standing assets. In the residential segment, investments in H1 2026 dropped by 43 per cent annually to $500 million.
Mixed-use assets and alternatives witnessed a significant rise in inflows particularly during Q2 this year. At approximately $800 million of investments each, these two segments accounted for nearly one-fifth of overall inflows apiece in H1 2026.
Foreign investors drove the majority of the activity in these segments largely through equity stake purchases, signalling their long-term intent in portfolio diversification beyond the core real estate segments. Additionally, the hospitality segment also witnessed strong momentum, attracting inflows of $300 million during H1 2026.
Although this was on a comparatively lower base, the segment saw over three-fold rise annually, largely led by foreign investors.
Chennai & Bengaluru Together Drive Around 27 Per Cent Of Inflows
Amongst the Tier I cities, Chennai and Bengaluru together saw $1.20 billion of real estate investments, cumulatively driving about 27 per cent of the inflows during H1 2026. Out of the approximately $600 million inflows in each of the two cities, the office segment accounted for a dominant 85–95 per cent share during H1 2026.
Notably, multi-city deals had a 46 per cent share in overall investment inflows during H1 2026. In fact, Tier II/III cities, such as Coorg, Hosur, Coimbatore, Kochi, and Ujjain, among others saw significant capital deployment, particularly in hospitality, industrial and warehousing, and residential segments during H1 2026.
