Domestic Capital Powers India’s Office Market as Institutional Real Estate Investments Reach USD 4.3 Billion in H1 2026

India’s institutional real estate market maintained strong momentum during the first half of 2026, recording USD 4.3 billion in investments across 54 transactions, according to JLL. Investment volumes increased 23% year-on-year, while deal activity reached its highest-ever level for a six-month period. The figures highlight growing confidence in India’s commercial property market despite ongoing global economic uncertainty.

The biggest shift came from domestic institutional investors, who accounted for a record 64% of total investment volumes, totalling USD 2.8 billion. The sharp rise in domestic capital helped offset a 37% decline in foreign investments, which were affected by inflation, currency volatility, and geopolitical challenges. Rather than relying on overseas capital, India’s office market is increasingly being supported by homegrown investors with long-term confidence in commercial real estate.

Office Assets Reclaim the Spotlight

Commercial office properties once again emerged as the preferred investment destination, attracting USD 2.3 billion across 17 transactions, representing 54% of total institutional investments during H1 2026. Investment in office assets grew 34% year-on-year, driven by sustained leasing demand, expanding Global Capability Centres (GCCs), and improving occupancy across Grade A office buildings.

Domestic investors accounted for 89% of all office investments, reflecting strong confidence in income-generating commercial assets. The continued expansion of REITs and domestic private equity funds has also strengthened investment activity, particularly in premium office developments that offer stable rental yields and long-term value creation.

Commenting on the market, Lata Pillai, Senior Managing Director and Head of Capital Markets, India, JLL, said, “India’s institutional real estate market has demonstrated exceptional resilience in H1 2026. The most significant development is the unprecedented rise in domestic institutional participation, which now accounts for 64% of total capital flows. This reflects the growing maturity of India’s investment ecosystem and reduces vulnerability to external shocks.”

Strong Office Demand Supports the Flex Workspace Ecosystem

The continued flow of institutional capital into office assets is positive news for India’s coworking and flexible workspace industry. As developers secure funding for new commercial projects, managed workspace operators gain access to a larger pipeline of modern, Grade A office inventory capable of supporting enterprise occupiers and expanding GCC requirements.

Bengaluru, Chennai, and Delhi-NCR remained the leading investment destinations, together accounting for 46% of total institutional investment volumes. These markets continue to benefit from strong corporate leasing activity, technology-driven demand, and a growing concentration of multinational companies establishing or expanding their GCC operations.

Market Outlook Remains Positive

Another notable trend during H1 2026 was the increase in transaction volume rather than deal size. Average investment values declined as investors diversified their portfolios across more assets, signalling a disciplined approach to risk management while maintaining exposure to India’s commercial property market.

JLL expects foreign institutional investors to gradually return during the second half of 2026 as macroeconomic conditions stabilise. However, the biggest takeaway from the first half is the growing strength of domestic capital. For developers, landlords, REITs, and flexible workspace operators, this shift creates a more resilient investment environment, ensuring continued funding for office development and reinforcing India’s position as one of the world’s fastest-growing commercial real estate markets.