New Delhi, Oct 27 (IANS) Institutional investment activity in India's real estate sector remained strong in Q3 2026, with investments rising 20 per cent year-on-year (YoY) and 12 per cent quarter-on-quarter (QoQ) to $2.1 billion, a report said on Tuesday.

The report from Cushman & Wakefield said foreign investors led investment activity, deploying $1.4 billion, accounting for 68 per cent of total investments, while domestic institutions contributed $0.7 billion, representing the remaining 32 per cent.

The quarter marked a reversal after four consecutive quarters of domestic-led investment activity, with foreign investments rising 64 per cent QoQ and 134 per cent YoY.

Domestic investments, meanwhile, moderated by 34 per cent QoQ and 39 per cent YoY, following a high base of domestic capital deployment over comparable periods.

Institutional investments totalled $5.5 billion year-to-date (YTD), up 11 per cent YoY. Domestic and foreign investors accounted for 52 per cent and 48 per cent of total investments, respectively.

Capital deployment by domestic institutions grew 15 per cent YoY, while foreign investments increased 8 per cent over the same period. This reflects continued confidence from both investor groups in India's real estate sector despite global economic uncertainties.

The data centre sector emerged as the largest recipient of institutional capital in Q3 2026, attracting 52 per cent 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 per cent of total inflows during the quarter, followed by office at 9 per cent.

Somy Thomas, Executive Managing Director, Capital Markets, Cushman & Wakefield, said that 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,” Thomas said.

Investors continued to favour diversified portfolio strategies, with multi-city transactions accounting for 76 per cent of total investment activity in Q3 2026.

Mumbai attracted 9 per cent of quarterly investments, followed by Delhi NCR at 6 per cent, highlighting investor preference for geographically diversified exposure across India's key real estate markets.

PE funds and REITs both are expected to continue to add to their portfolio with strategic investments, the report forecasted.

—IANS

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