Office spaces steal the spotlight as real estate investments hit six-year high

Photo credit: ANI

Institutional investments in the real estate sector increased 70 per cent year-on-year to $2.9 billion in the second quarter of calendar year 2026, supported by robust participation from both domestic and foreign investors in the office and mixed-use segments.According to a report by Colliers, investments in the sector hit a six-year high during the first half of 2026, because of growing confidence among domestic investors and sustained foreign investments in alternative and mixed-use assets.As per the report, domestic investments more than doubled to $1.33 billion during the quarter, making up 46 per cent of total inflows, while foreign investments shared 54 per cent and stood at $1.54 billion, despite uncertainties related to the Middle East conflict.Major foreign investments included Abu Dhabi Investment Authority’s (ADIA) $675 million in Kotak Alternate Asset Managers' mixed-use assets across multiple cities, the largest deal of the quarter, and Canada Pension Plan Investment Board’s (CPPIB) $440 million investment in CtrlS.Chennai and Bengaluru together attracted around $1.2 billion in investments between January and June 2026, accounting for about 27 per cent of total institutional inflows, according to the report.

The office segment accounted for the bulk of investments in both cities, with a share of around 85-95 per cent.The report also highlighted increased capital deployment in Tier II and Tier III cities, particularly across the hospitality, industrial and warehousing, and residential sectors, with Coorg, Hosur, Coimbatore, Kochi and Ujjain among the cities that recorded significant investments during the first half of the year.Overall, the office segment remained the largest investment destination, attracting around $1.9 billion and accounting for more than 40 per cent of total inflows during the first half of calendar year 2026.Meanwhile, investments in the residential segment fell 43 per cent year-on-year to $0.5 billion during the January-June 2026 period, the report said.