Institutional investments in India’s real estate sector surged 74% year-on-year to $1.41 billion in Q1 2026 from $0.81 bn in Q1 2025, according to a report by Vestian. However, on a quarterly basis, inflows declined sharply by 62% quarter-on-quarter from $3.73 billion in Q4 2025, primarily due to a high base effect, it said.
In Q1 2025, inflows stood at $0.81 billion, followed by a sharp rebound to $1.80 billion in Q2 2025, marking a 122% increase. This was followed by a marginal dip to $1.76 billion in Q3 2025. Investments then surged to $3.73 billion in Q4 2025, before dropping steeply to $1.41 billion in Q1 2026, Vestian said.
Despite the sequential decline, Q1 2026 marked the strongest first-quarter performance since 2022. “This highlights strong investor confidence in India’s real estate sector, even as global headwinds continue to intensify,” the report said.
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A notable shift during the quarter was the decline in foreign investments, with its share falling to 13% from over 40% a year earlier amid escalating geopolitical frictions. Co-investments also dropped to 15% from 37% in the previous quarter, indicating a more cautious investment environment.
In contrast, domestic investors emerged as the key drivers of growth. Their share rose sharply to 72% in Q1 2026 from 22% in Q4 2025. In value terms, domestic inflows exceeded $1 billion, registering a 118% YoY increase and a 25% QoQ rise, Vestian said.
Shrinivas Rao, FRICS, CEO, Vestian, said, “With a sharp uptick in domestic investments, India’s real estate sector continues to demonstrate resilience in the face of rising geopolitical tensions and macroeconomic headwinds. As foreign participation moderates, domestic capital is sustaining the market momentum, while GCC-led demand continues to bolster confidence in commercial assets—reinforcing India’s appeal as a long-term investment destination.”
Commercial assets anchor investments, residential investments dip
Vestian said that commercial real estate remained the dominant segment, accounting for nearly 80% of total inflows in Q1 2026, up from 38% a year earlier. In value terms, the segment attracted over $1.1 billion, registering a robust 266% YoY growth, even as it declined 51% compared to the previous quarter.
This sustained interest has largely been driven by Global Capability Centres (GCCs), which continue to expand in India and support demand for high-quality office assets despite global uncertainties, the report said.
Residential real estate recorded a decline in investment activity, with inflows falling 53% QoQ and 59% YoY to around $0.2 billion. However, its share in overall investments rose slightly to 15% from 12% in the previous quarter, indicating relatively better stability compared to other segments.
Meanwhile, the industrial and warehousing segment saw a sharp drop in traction, attracting just $22 million in Q1 2026. Its share fell drastically from 17% in Q4 2025 to just 1%, reflecting weak investor interest during the quarter, the report said.
Similarly, diversified assets saw inflows of $55.8 million in Q1 2026, it said.
