Domestic institutional investors continued to dominate India's real estate sector for the third consecutive quarter, driven by global macroeconomic uncertainties impacting foreign inflows and rising confidence in domestic market fundamentals, according to a report by Cushman & Wakefield.

As per the firm's Q1 2026 Capital MarketBeat report, domestic investors accounted for 76 per cent of total institutional inflows at $1.2 billion during the quarter, compared to foreign investments of $0.4 billion, which made up 24 per cent. Total institutional investment stood at $1.6 billion, marking a 26 per cent year-on-year increase, though declining 52 per cent sequentially.

The report noted that foreign capital remains sensitive to global macroeconomic and geopolitical developments, while domestic capital is increasingly providing stability and continuity to investment activity. This has led to a sustained rebalancing of capital flows, with domestic investors accounting for a larger share in four of the last five quarters.

Over the past three quarters, domestic participation has steadily increased, rising from around 63 per cent ($1.1 billion) in Q3 2025 to 81 per cent ($2.7 billion) in Q4 2025, before moderating slightly to 76 per cent in Q1 2026, reflecting consistent local conviction in real estate as an asset class. The report highlighted that overall investment activity in Q1 2026 marked the highest first-quarter deployment since 2021, underscoring the scale and resilience of capital flows despite global uncertainties.

Private Equity remained the dominant investment route, accounting for 74 per cent of inflows, while Real Estate Investment Trusts (REITs) contributed 26 per cent. Segment-wise, the office sector led institutional investments with $1.0 billion, representing 64 per cent of total inflows. The hospitality sector followed with a 13 per cent share, while the residential segment accounted for 9 per cent, indicating continued preference for commercial real estate assets.

At the city level, Delhi NCR attracted the highest share at 28 per cent, followed by Chennai at 17 per cent and Bengaluru at 14 per cent, reflecting broad-based investor interest across major metropolitan markets. Commenting on the trend, Somy Thomas, Executive Managing Director, Cushman & Wakefield said, "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."

He added that strong leasing activity, occupancy levels and income visibility in office assets, along with consistent REIT performance, are reinforcing real estate's position as a core, yield-driven investment within domestic portfolios.

Published on April 28, 2026