India real estate attracts USD 2.9 bn in Q2 CY2026; Chennai, Bengaluru drive 27% inflows: Report
New Delhi, July 3
Institutional investments in Indian real estate rose 70 per cent year-on-year to USD 2.9 billion in the second quarter of calendar year 2026, driven by strong domestic and foreign investor participation, with Chennai and Bengaluru contributing around 27 per cent of inflows, according to a report by Colliers.
The report said domestic investments more than doubled to USD 1.33 billion during the quarter, accounting for 46 per cent of the total inflows. Foreign investments stood at USD 1.54 billion, contributing 54 per cent of the total despite global trade and capital deployment uncertainties arising from the West Asia crisis. The inflows were supported by select large transactions.
According to the report, Abu Dhabi Investment Authority (ADIA) recorded the largest deal of the quarter by investing USD 675 million in Kotak Alternate Asset Managers' mixed-use assets across multiple cities.
Canada Pension Plan Investment Board (CPPIB) followed with a USD 440 million investment in CtrlS in the alternatives segment.
The report said capital inflows into Indian real estate touched a six-year high during the first half of 2026, supported by rising confidence among domestic investors, continued foreign capital deployment and increased investments in alternative and mixed-use assets.
It added that institutional investors continue to remain positive on India's long-term growth prospects, with the International Monetary Fund (IMF) recently raising its GDP growth forecast for FY2027 by 10 basis points to 6.5 per cent.
City-wise, Chennai and Bengaluru together attracted about USD 1.2 billion in investments during January-June 2026, accounting for around 27 per cent of the total inflows. The office segment dominated investments in both cities, with a share of around 85-95 per cent.
The report also noted increased capital deployment in Tier II and III cities, particularly in the hospitality, industrial and warehousing, and residential segments. Cities such as Coorg, Hosur, Coimbatore, Kochi and Ujjain witnessed significant investments during the first half of 2026.
Overall, the office segment remained the largest investment destination, attracting around USD 1.9 billion and accounting for more than 40 per cent of total inflows during H1 CY2026.
However, investments in the residential segment declined 43 per cent year-on-year to USD 0.5 billion during January-June 2026, the report said.
— ANI
Reader Comments
Finally some good economic data! As someone working in Bengaluru's real estate sector, I can confirm the office space demand is real. Companies are expanding like crazy. But developers need to stop overpricing - a 2BHK shouldn't cost 2 crores in a Tier-II city!
ADIA putting ₹675 million is huge! But I worry about foreign control of Indian assets. We need strong regulations to ensure this doesn't become like the telecom sector where foreign funds dictate terms. India should benefit, not just global investors.
Tier-II cities like Coimbatore, Kochi and even Coorg getting investments is a positive sign. Finally, development is spreading beyond metros! My hometown Hosur is booming - hope we get better infrastructure and job opportunities without losing our green spaces.
Domestic investments more than doubling is the real story here! 🇮🇳 Shows Indian investors have confidence in our own economy. But 43% drop in residential is worrying - maybe people are shifting to REITs and commercial assets because home prices are insane. Need policies to boost affordable housing.
Interesting data from an international perspective. India's GDP growth forecast upgrade to 6.5% makes it a compelling destination for foreign capital. The office space dominance suggests strong corporate confidence. Will watch how Bangalore and Chennai markets evolve.
K We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.