India Real Estate Sector Sees $5.1 Billion Q1 2026 Inflows
India's real estate sector recorded a significant increase in investment inflows in the first quarter of 2026, with a total of $5.1 billion invested in the sector, marking a 72% year-on-year increase, according to the India Market Monitor Q1 2026 – Investments report by CBRE South Asia.
Key Highlights:
- Developers accounted for 42% of the total investments, while Real Estate Investment Trusts (REITs) contributed about 40%.
- Domestic investors made up nearly 96% of the inflows.
- Over 90% of equity investments were directed towards office assets and land acquisitions.
- Bengaluru, Mumbai and Delhi-NCR together accounted for around 65% of the total inflows.
Expert Views:
Binitha Dalal, Founder and Managing Partner at Mt. K Kapital said, "The inflows reflect confidence in the sector's long-term fundamentals and highlighted the increasing role of domestic capital and REITs in overall investment activity."
Amrita Gupta, Director at Manglam Group said, "The share of developer-led investments and the focus on office assets and land acquisitions indicate a forward-looking approach by the industry, adding that there are early signs of interest in developments beyond major metro markets."
How REITs Work:
Rajesh Deo, CFO at Nexus Select Trust outlined how REITs function as an investment structure. He said, "REITs allow investors to hold units in portfolios of income-generating real estate assets and are traded on stock exchanges, offering liquidity compared to physical property."
REIT Regulations and Taxation:
Rajesh Deo, CFO at Nexus Select Trust said, "REITs operate under a pass-through framework, where certain income streams such as interest and rental income are not taxed at the trust level but in the hands of investors. He added that REIT regulations require distribution of at least 90% of net distributable cash flows to unitholders."
He also noted that taxation of returns depends on the nature of income distributed—dividend, interest, or capital repayment—and that capital gains on REIT units are taxed in line with listed securities, based on the holding period.