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Institutional investments in India's residential real estate sector declined sharply during the first half of 2026, with inflows dropping 85% year-on-year to USD 153.62 million, according to Cushman & Wakefield. Despite the steep fall in housing investments, total institutional investments across the Indian real estate sector increased 6% to USD 3.46 billion, supported by stronger domestic investor participation and substantial capital deployment into office and data centre assets. Office projects attracted more than USD 1.97 billion during the six-month period, while data centres secured USD 838.97 million after receiving no institutional investment in the corresponding period last year. The findings indicate a shift in investor preference towards income-generating and digital infrastructure assets, even as investment activity across the broader real estate market remained resilient.
Institutional investments in India's residential real estate market declined 85% year-on-year to USD 153.62 million during the January-June period of 2026, according to data released by real estate consultancy Cushman & Wakefield in the past week. The sharp decline came despite an overall increase in institutional capital flowing into the country's real estate sector, driven by stronger investments in office and data centre assets.
The consultancy reported that total institutional investments across Indian real estate reached USD 3.46 billion in the first six months of 2026, representing a 6% increase from USD 3.26 billion recorded during the corresponding period last year. The overall growth was primarily supported by domestic investors, who continued to account for the majority of capital deployed across asset classes.
Within the residential segment, investments fell from USD 1,019.88 million in the first half of 2025 to USD 153.62 million during the same period this year. Retail real estate also witnessed a decline in institutional funding, with investments reducing to USD 161.53 million from USD 542.38 million in the previous year.
In contrast, office assets emerged as the largest recipient of institutional capital. The segment attracted USD 1,970.74 million during the January-June period, more than doubling from USD 729.48 million recorded a year earlier. Data centres also witnessed a significant rise in investor interest, receiving USD 838.97 million in institutional investments compared with no recorded inflows during the corresponding period of 2025.
Commenting on the investment trends, Somy Thomas, Executive Managing Director, Capital Markets, Cushman & Wakefield, said capital allocation across real estate asset classes was becoming increasingly differentiated. He stated that while office assets continued to attract a wide range of investors because of their maturity, liquidity and stable income profile, growing interest was also being seen in the data centre segment as investors sought opportunities arising from India's expanding digital infrastructure ecosystem. He added that this diversification of capital was contributing to a deeper and more resilient investment market.
Thomas further noted that institutional investment activity is expected to remain resilient through the second half of 2026, with domestic investors likely to continue driving market momentum.
According to the report, domestic institutions invested approximately USD 2.2 billion during the first half of 2026, while foreign investors accounted for around USD 1.3 billion. The investment pattern reflects an evolving preference for established income-generating commercial assets and emerging digital infrastructure projects, even as capital deployment into residential and retail real estate moderated during the period.
Source - PTI
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