Report says India’s real estate investment hits USD 2.9 Billion in Q2 2026; Chennai, Bengaluru leads growth

India’s real estate sector saw a sharp 70 per cent year-on-year jump in institutional funding during the April-June quarter of 2026, reaching USD 2.9 billion, according to a Colliers report.

Strong participation from both local and international investors is said to be behind the surge, with Chennai and Bengaluru alone accounting for close to 27 per cent of the total money that flowed in.Local investors more than doubled their commitments compared to the previous year, putting in USD 1.33 billion: nearly half of all inflows for the quarter. Overseas investors, meanwhile, contributed USD 1.54 billion, or a little over half the total, showing resilience even as broader concerns around global trade and capital flows persisted amid tensions in West Asia.

A few major deals played a significant role in pushing up the quarter's figures.The largest single transaction came from the Abu Dhabi Investment Authority, which invested USD 675 million in a portfolio of mixed-use properties managed by Kotak Alternate Asset Managers across various cities. Not far behind, the Canada Pension Plan Investment Board put USD 440 million into CtrlS, a company operating in the alternative assets space.

Looking at the first six months of 2026 as a whole, real estate capital inflows reached their highest point in six years. The report attributed this to improving confidence among Indian investors, steady interest from abroad, and a growing appetite for alternative and mixed-use property investments. It also noted that institutional investors continue to bet on India’s economic trajectory over the long run, a sentiment echoed by the IMF's recent upward revision of its FY2027 growth projection: raised by 10 basis points to 6.5 per cent.Among individual cities, Chennai and Bengaluru jointly pulled in about USD 1.2 billion between January and June, making up roughly 27 per cent of total investment during that stretch. In both cities, commercial office space was by far the preferred asset, capturing somewhere between 85 and 95 per cent of all investment activity.The report further pointed to growing investor interest beyond the major metros, with smaller cities in the hospitality, warehousing and industrial, and residential categories drawing increased attention.

Places like Coorg, Hosur, Coimbatore, Kochi and Ujjain all saw meaningful investment during the first half of the year.Office space continued to be the most sought-after category overall, attracting close to USD 1.9 billion and making up over 40 per cent of the half-year total. Residential real estate told a different story, though—investment in this segment dropped 43 per cent from the previous year, totalling just USD 0.5 billion for the six-month period.