Institutional real estate investment in India rose 16% quarter-on-quarter to $1.9 billion in Q2 2026, with office and data centres together accounting for 91% of all capital deployed, per Cushman & Wakefield.
Institutional money kept flowing into Indian real estate through the April-June quarter, just not quite as fast as it did a year ago. Cushman & Wakefield's latest Capital Marketbeat report puts Q2 2026 institutional investment at $1.9 billion, up 16% from the previous quarter, though still down 7% compared to the same quarter last year. For the first half of 2026 as a whole, total investment reached $3.5 billion, a 6% increase over H1 2025. Read together, those numbers tell a fairly calm story, a market that's cooled slightly year-on-year but is still deploying capital consistently, not one that's pulling back.
What stands out isn't the total, it's the concentration. Office space pulled in nearly $1 billion in Q2 2026 alone, 51% of everything invested, marking the fourth consecutive quarter that offices have led India's real estate investment activity. Data centres came in second at 40%, a genuinely striking share for what's still a relatively young asset class in India, driven by AI adoption, cloud expansion and data localisation requirements pushing operators to build out capacity fast. Between the two, office and data centres accounted for 91% of all institutional capital deployed in the quarter. Everything else, retail, industrial, residential, split the remaining 9%.
Here's a shift worth sitting with: domestic institutions accounted for 54% of Q2 2026 investment, ahead of foreign investors at 46%, and domestic capital has now led for four straight quarters. Zoom out to the full first half, and the gap widens further, domestic investment stood at $2.2 billion, 64% of total activity, up sharply from just 43% during H1 2025. Foreign investment, by contrast, fell to 36% of the total from 57% a year earlier. That's not a small swing. It suggests Indian institutional capital has genuinely deepened over the past year, enough to counterbalance the usual volatility that comes with foreign flows reacting to currency moves and global politics.
Multi-city portfolio deals dominated the quarter, accounting for 55% of total capital deployed, as investors leaned toward diversified exposure rather than betting on one market alone. Among individual cities, Bengaluru led with a 23% share, followed by Chennai at 17%. Private equity remained the dominant capital source at 85% of total volumes, with REIT-led investment making up the remaining 15%.
Somy Thomas, Executive Managing Director for Capital Markets at Cushman & Wakefield, described capital allocation as becoming "increasingly differentiated across asset classes," with office continuing to draw a broad investor base on the strength of its maturity and income stability, while data centres pull in capital chasing India's expanding digital infrastructure story. Looking to H2 2026, the firm expects investment activity to hold steady, with domestic capital continuing to anchor the market and foreign participation improving gradually as global conditions settle.
This report is a reminder that institutional confidence in Indian real estate right now is really an office and data-centre story more than a residential one, and that has knock-on effects even for buyers. Bengaluru and Chennai led this quarter's city-wise investment, but Gurugram's own office market recently crossed 100 million sq. ft. of total stock, and sustained institutional interest in office assets like these tends to filter into surrounding residential demand over time. It’s exactly the pattern we've watched at Hommea, played out around projects like Godrej Samaris. Worth keeping an eye on whether NCR's office story starts pulling a larger share of this institutional capital in the second half of the year.
