Despite the overall contraction, the office real estate segment significantly outpaced other asset classes, attracting nearly 89 per cent of total investments. Funding in this segment rose sharply by 33 per cent to 998 million dollars, up from 579 million dollars a year earlier, underscoring strong institutional preference for income-generating commercial assets.
In contrast, the residential segment witnessed a steep decline in investment inflows, attracting only 128 million dollars during the period, compared with 297 million dollars in the corresponding months of the previous year. The warehousing and retail segments saw no significant private equity transactions, although the report clarified that the absence of deals does not necessarily reflect weakened investor interest in these categories.
City-wise investment trends showed the National Capital Region emerging as the largest recipient of office capital, drawing 363.8 million dollars. Pune followed with 308.8 million dollars, while Chennai received 154.7 million dollars, Bengaluru secured 115.9 million dollars, and Mumbai recorded 54.6 million dollars.
According to Knight Frank India, the strong performance of the office sector has been driven by sustained demand from Global Capability Centres, multinational corporations, and domestic enterprises. India’s skilled workforce, competitive cost structure, and expanding role in global business operations continue to support robust leasing activity in the commercial office space.
The report further highlighted a marked shift in investor behaviour towards completed office assets. Ready-to-occupy properties accounted for approximately 75 per cent of total office investments in the first half of 2026, rising from 53 per cent in the previous year. ANI reported that investors are increasingly favouring completed assets due to immediate rental income, reduced execution risk, and greater return certainty amid elevated global interest rates.
Shishir Baijal, International Partner, Chairman, and Managing Director of Knight Frank India, stated that the moderation in private equity inflows during the period reflects global capital market conditions rather than any deterioration in India’s underlying real estate fundamentals. He noted that rising global borrowing costs have reduced the yield advantage traditionally associated with emerging markets, leading investors to prioritise execution certainty, taxation efficiency, liquidity, and realised returns.
Baijal further emphasised that India’s office market continues to demonstrate resilience, supported by strong occupier demand, expanding Global Capability Centre operations, and the growing availability of institutional-grade assets. He added that future capital inflows will depend on the creation of a more competitive investment framework alongside sustained market strength.
The findings underline a structural shift in investor confidence towards India’s commercial office sector, positioning it as the primary magnet for global capital even in a phase of overall investment moderation.
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