Institutional investors committed US dollar (USD) 4.5 bn to Indian real estate in the first half of 2026, with Chennai and Bengaluru together drawing about USD 1.2 bn, or nearly 27 per cent of the total. This concentration reflected a sustained preference for metropolitan office markets among institutional capital.

Investment momentum remained resilient despite geopolitical headwinds, with institutional inflows rising 70 per cent year-on-year to USD 2.9 bn in the second quarter. The report indicated domestic confidence and opportunistic foreign allocations underpinned the gains, and noted the IMF had raised its GDP forecast for fiscal 2027 by 10 basis points to 6.5 per cent.

Office assets dominated flows, attracting around USD 1.9 bn and accounting for over 40 per cent of capital deployment nationally. In Chennai and Bengaluru the office segment represented between 85 and 95 per cent of inflows, while multi-city transactions comprised 46 per cent of overall investments and smaller cities saw meaningful allocations to hospitality, industrial, warehousing and residential projects.

Domestic investors drove activity in H1, with capital deployment up 80 per cent year-on-year to USD 2.6 bn and representing roughly 57 per cent of total inflows. Foreign investment rebounded to USD 1.9 bn, a 24 per cent increase year-on-year, led by strategic equity investments and stake acquisitions that lifted activity in mixed-use and alternative asset classes.

Residential investment cooled, falling 43 per cent annually to USD 0.5 bn as cost pressures and softer sales tempered developer appetites. Colliers India noted continued monetisation of operational office assets, including another REIT listing, and anticipated further leasing growth in the second half, signalling that institutional appetite for offices and diversified assets is likely to persist albeit with greater selectivity.