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India's real estate sector is expected to close 2026 on a strong note as capital inflows surged to a record USD 9.5 billion in the July-September quarter, with foreign investors returning strongly and institutional capital driving investments, according to a CBRE report.
The inflows in the third quarter more than doubled from USD 4.4 billion in the year-ago period and rose from USD 3.8 billion in the preceding quarter, CBRE said in its India Market Monitor Investments for Q3 2026. CBRE said sustained capital deployment into built-up assets and new project developments across traditional and emerging real estate sectors is expected to support investment activity in the coming quarters. However, geopolitical uncertainties and interest rate shifts remain key watchpoints. Data centres, built-up office assets and land/development sites accounted for nearly 91 per cent of total capital deployed during the quarter, reflecting growing investor interest in both established and emerging real estate segments. Foreign investors accounted for about 59 per cent of total inflows in Q3, marking a significant comeback. US investors contributed around 90 per cent of foreign capital, followed by investors from Canada, Singapore and Japan. Institutional investors accounted for nearly 79 per cent of overall inflows, sharply higher than about 28 per cent in the previous quarter. Developers accounted for around 13 per cent of investments. Mumbai, Delhi-NCR and Chennai together accounted for about 53 per cent of investment inflows during the quarter, while multi-city transactions contributed around 15 per cent. Capital deployed towards site and land acquisitions was also largely directed towards office, residential and data centre developments, which together accounted for about 72 per cent of such investments. The remainder went towards mixed-use, hotel, retail, and industrial and logistics projects. With the strong third quarter, total real estate capital inflows during the first nine months of 2026 reached USD 18.6 billion, nearly double the corresponding period of 2025 and already above the full-year inflows of USD 14.2 billion recorded in 2025. CBRE said demand for built-up assets is expected to remain supported by institutional investors, including private equity funds, pension funds and sovereign wealth funds, along with REIT-led acquisitions of income-generating assets. The data centre segment is also expected to see sustained capital deployment, supported by institutional allocations, expanding hyperscaler and colocation activity, and rising AI-driven computing requirements. CBRE said investment activity in 2026 is expected to close on a strong note, supported by the sharp upswing recorded in the third quarter. (ANI)
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