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Institutional investments in Indian real estate increased 26 per cent year-on-year to USD 1.6 billion during the first quarter of the current calendar year, according to a report by Cushman & Wakefield. However, inflows declined sharply by 52 per cent compared to the previous quarter, reflecting the impact of geopolitical tensions, including the West Asia conflict. Domestic investors accounted for the majority of capital deployment at USD 1.21 billion, continuing a multi-quarter trend of rising local participation. Delhi-NCR led investment activity, followed by Chennai and Bengaluru, indicating sustained interest in key office and commercial markets despite global headwinds.
Institutional investments in Indian real estate rose 26 per cent year-on-year to USD 1.6 billion during the January–March quarter, although inflows declined 52 per cent compared to the preceding quarter, reflecting the impact of global macroeconomic conditions and geopolitical tensions, according to a report by Cushman & Wakefield. Advertisement
The consultant noted that total investments stood at USD 1.27 billion in the corresponding period of the previous year, while the October–December quarter had recorded significantly higher inflows of USD 3.35 billion. The sequential decline has been attributed in part to the ongoing West Asia conflict, which has influenced investor sentiment, particularly among foreign capital providers.
Domestic investors continued to dominate capital inflows during the quarter, contributing USD 1.21 billion, compared to USD 0.75 billion in the year-ago period and USD 2.71 billion in the preceding quarter. In contrast, foreign investments declined to USD 0.39 billion, from USD 0.52 billion in the same quarter last year and USD 0.61 billion in the previous quarter.
Cushman & Wakefield indicated that domestic investors have accounted for a larger share of institutional investments in four of the last five quarters, highlighting a structural shift in capital flows within the real estate sector. It was noted that while foreign capital remains sensitive to global macroeconomic and geopolitical developments, the growing depth of domestic capital is providing stability and continuity to investment activity.
The report observed that domestic capital has been particularly active in the office segment, supported by steady leasing demand and income visibility. It further noted that the consistent performance of real estate investment trusts has strengthened investor confidence in income-generating assets. At the same time, relatively subdued returns in equity markets have led to a reallocation of capital towards yield-driven real estate investments.
At a city level, Delhi-NCR accounted for the highest share of institutional investments during the quarter at 28 per cent, followed by Chennai with 17 per cent and Bengaluru with 14 per cent. The distribution reflects continued investor preference for established commercial markets with strong occupier demand.
Industry stakeholders indicated that the geographical spread of investments underscores the resilience of key real estate markets, particularly Bengaluru, which continues to attract long-term capital due to its established office ecosystem.
Market participants further noted that sustained domestic capital inflows are supporting project pipelines, enabling new developments, and helping maintain pricing discipline even as external uncertainties persist.
The data suggests that while global factors continue to influence investment cycles, domestic capital is playing an increasingly central role in sustaining momentum across India’s real estate sector.
Source - PTI
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