April 23, 2026 |
Realty Inflows Surge To $5.1 Bn In Q1, Industry Flags Sustainability Concerns
India’s real estate sector saw strong investment activity in the first quarter of 2026, with steady demand across the residential and office segments and growing interest in newer asset classes such as data centres and logistics, as more capital flowed into key urban markets.
According to a CBRE report, the sector attracted USD 5.1 billion in investments during January–March 2026, marking a 72 per cent year-on-year increase from USD 2.9 billion a year ago and a 53 per cent rise over the previous quarter, making it the highest capital inflow recorded in any quarter so far.
Are Inflows Sustainable Long-term?
Domestic investors accounted for nearly 96 per cent of total inflows, with developers contributing about 42 per cent and REITs close to 40 per cent, the report showed. REIT investments alone crossed USD 2 billion, indicating a shift towards rent-yielding assets.
“Persistent trust in the Indian real estate market is clearly visible in these record inflows,” said Robin Mangla, President, M3M India, adding that capital is increasingly backing developers with consistent delivery.
However, he cautioned, “Capital must be channelled with calibration to avoid inflated valuations in already operating premium markets,” noting that sustaining momentum will depend on translating investments into quality supply.
Bengaluru, Mumbai and Delhi-NCR together accounted for around 65 per cent of total investments, reflecting a concentration of capital in major urban centres, the report noted.
Parvinder Singh, CEO, Trident Realty, said, “The increase in investments indicates India’s emergence as a credible and scalable market, driven by urbanisation, formalisation and an organised real estate sector.”
He added, “A balanced alignment between capital inflows, sustainable development, infrastructure readiness and buyer affordability will be crucial in sustaining investor trust and long-term sector stability.”
Will Execution Match Momentum?
According to the report, the investment momentum is supported by demand across residential and office segments, along with increasing interest in newer asset classes such as data centres and logistics.
Ashish Agarwal, Director, AU Real Estate, said, “The jump of 72 per cent indicates that investors are returning strongly, looking at both residential and office properties along with newer asset classes.”
However, he added, “Maintaining this momentum will require proper capital management, quick clearance of regulations and continuous infrastructure push,” while stressing the need for execution, governance and product quality.
Investment activity is increasingly shifting towards specific corridors and micro-markets rather than being evenly spread across cities.
“Capital is not just returning, but becoming more focused and selective in how it is deployed,” said Rishi Raj, CEO, Conscient Infrastructure.
He added, “Investment is concentrating in locations where infrastructure, connectivity and long-term planning are clearly visible,” noting that such micro-markets are emerging as key drivers of demand and long-term value.
Selective Capital, Disciplined Growth
Domestic investors accounted for nearly 96 per cent of total inflows during the quarter, with developers and REITs together driving a significant share of investments, indicating increasing market depth, the report showed.
“The strong growth in capital inflows reflects renewed confidence in India’s real estate sector, supported by stable economic fundamentals and sustained demand across residential, commercial, and emerging asset classes,” said Deepak Sangwan, Chairman, Origen Realty.
He added, “Capital deployment remains selective, with a clear preference for quality assets, strong execution, and projects with visible demand,” noting that while the outlook remains positive, the pace of investments will be guided by demand stability, policy consistency and long-term value.
Source – Businessworld
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