Institutional investment activity in India's real estate sector remained robust during Q3 2026. According to Cushman & Wakefield's Q3 2026 Capital MarketBeat report, investments reached USD 2.1 billion, registering a 12% quarter-on-quarter (q-o-q) and 20% year-on-year (y-o-y) increase. Foreign investors led investment activity during the quarter, deploying USD 1.4 billion and accounting for 68% of total investments, while domestic institutions contributed USD 0.7 billion, representing the remaining 32%.
After four consecutive quarters of domestic-led investment activity, foreign investors regained the lead in Q3 2026. Foreign investments increased 64% q-o-q and 134% y-o-y, reflecting renewed interest in Indian real estate. Domestic investments, meanwhile, moderated by 34% q-o-q and 39% y-o-y, following a high base of domestic capital deployment over comparable periods.
Year-to-date (YTD), institutional investments totalled USD 5.5 billion, up 11% y-o-y. Domestic and foreign investors accounted for 52% and 48% of total investments, respectively. Capital deployment by domestic institutions grew 15% y-o-y, while foreign investments increased 8% over the same period. This reflects continued confidence from both investor groups in India's real estate sector despite global economic uncertainties.
Data Centres Continue to Attract Investor Attention
The data centre sector emerged as the largest recipient of institutional capital in Q3 2026, attracting 52% of total investments and moving up from second position in the previous quarter. The growing allocation reflects increasing investor confidence in India's digital infrastructure story, supported by rising demand from AI-led workloads, cloud adoption and data localisation requirements. The hospitality sector accounted for 15% of total inflows during the quarter, followed by office at 9%.
Multi-City Investments Dominate
Investors continued to favour diversified portfolio strategies, with multi-city transactions accounting for 76% of total investment activity in Q3 2026. Among individual markets, Mumbai attracted 9% of quarterly investments, followed by Delhi NCR at 6%, highlighting investor preference for geographically diversified exposure across India's key real estate markets.
Private equity investors remained the dominant source of institutional capital during Q3 2026, accounting for 88% of total investment activity, while REIT-led investments contributed 12%.
Looking ahead, PE funds and REITs both are expected to continue to add to their portfolio with strategic investments.
Somy Thomas, Executive Managing Director - Capital Markets, Cushman & Wakefield, said
“India's real estate investment market delivered another strong quarter despite global economic uncertainties, reflecting sustained confidence in the sector's underlying fundamentals. While investors remain selective in their deployment strategies, capital continues to gravitate towards opportunities backed by scale and long-term growth potential. The higher share of foreign capital this quarter reflects the attractiveness of India's real estate sector and the breadth of opportunities available across asset classes. This is also evident in the growing allocation towards data centres, which attracted over half of all institutional investments in Q3 2026, underscoring investors' growing conviction in India's digital infrastructure growth story.”
