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Institutional investments in Indian real estate increased 23% year-on-year to USD 4.3 billion during the first half of 2026, supported by record domestic capital participation despite a slowdown in overseas inflows, according to a JLL report released on June 25. The market recorded 54 transactions, the highest ever for a six-month period, with domestic investors contributing a record 64% of total investments, or USD 2.8 billion. Office assets remained the preferred investment destination, attracting USD 2.3 billion, while Bengaluru, Chennai and Delhi-NCR accounted for nearly half of total investment activity. The report suggests that improving domestic liquidity, increasing participation by local institutional investors and resilient occupier demand continued to underpin investment activity, even as global geopolitical and macroeconomic uncertainties weighed on foreign capital deployment.
India's institutional real estate market recorded a strong recovery in the first half of 2026, with investment volumes rising 23% year-on-year to USD 4.3 billion across a record 54 transactions, according to the latest report released by JLL. Published on June 25, the report attributes the growth primarily to an unprecedented rise in domestic institutional capital, which helped offset weaker foreign investment amid global economic and geopolitical uncertainties.
The report noted that domestic institutional investors contributed USD 2.8 billion, accounting for 64% of total institutional investment during the January-June period—the highest share ever recorded in the Indian real estate market. In contrast, foreign institutional investment declined 37% year-on-year, reflecting continued caution among overseas investors due to inflationary pressures, currency volatility, geopolitical tensions and capital repatriation requirements.
JLL also highlighted a shift in transaction patterns during the period. While investment activity strengthened, the average deal size declined by nearly 40%, from USD 133 million in the first half of 2025 to approximately USD 80 million in the corresponding period this year. According to the report, investors increasingly diversified capital across a larger number of smaller transactions instead of concentrating investments in a limited number of large deals, reflecting a more measured approach to risk allocation.
The office segment emerged as the largest recipient of institutional capital, attracting approximately USD 2.3 billion, or 54% of total investments, across 17 transactions. Domestic investors accounted for 89% of office sector investments, supported by continued expansion of Global Capability Centres (GCCs), improving office occupancy trends and attractive rental yields. Bengaluru, Chennai and Delhi-NCR collectively accounted for 46% of overall institutional investment volumes during the six-month period, reaffirming their position as the country's leading investment destinations.
JLL observed that the growing role of domestic private equity funds and Real Estate Investment Trusts (REITs) marked an important structural shift in India's investment landscape. Domestic investors increasingly favoured equity investments, with equity accounting for 83% of domestic capital deployment during the period, compared with a more balanced debt-equity mix in previous years. The consultancy expects foreign institutional participation to improve as geopolitical risks ease and global macroeconomic conditions stabilise, potentially supporting total institutional investment of USD 8.5–9 billion during calendar year 2026 if current market conditions continue.
Industry stakeholders said the report reflects strengthening confidence in India's real estate sector. Umesh Gowda H A, Chairman and Founder of Sanjeevini Group, said rising institutional investment demonstrated growing confidence among both domestic and international investors in the sector's long-term fundamentals. He noted that sustained economic growth, rapid urbanisation, infrastructure development and evolving occupier demand continue to create opportunities across residential, commercial and mixed-use developments, adding that continued capital inflows are expected to improve project execution and asset quality.
Ankur Jalan, Chief Executive Officer of Golden Growth Fund (GGF), a Category II real estate-focused Alternative Investment Fund (AIF), said the increase in institutional investment reflected the growing maturity of India's real estate investment market. He observed that higher participation from domestic investors underscored confidence in the country's long-term economic fundamentals, regulatory transparency and the resilience of income-generating real estate assets. He added that the growing role of local capital is likely to support sustained investment activity while creating opportunities for alternative investment platforms.
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