Global institutional capital is making a strong comeback to commercial real estate (CRE) markets in 2026, with investors planning to deploy nearly USD 144 billion globally, according to Knight Frank’s latest Active Capital Survey 2026. The study, based on responses from 119 of the world’s largest real estate investors managing over USD 1.4 trillion in assets, points to renewed confidence driven by easing interest rates, improving occupier demand and long-term structural trends.
The survey reveals that 87% of investors, by assets under management, plan to increase their direct exposure to commercial real estate in 2026, while 62% expect to be net buyers. This marks a clear shift from the cautious sentiment seen in recent years. Against this backdrop, India is steadily strengthening its position as a preferred destination for long-term global capital, offering scale, income visibility and improving asset quality.
While the UK and Germany continue to top the list of global capital destinations, India is transitioning from a peripheral emerging market allocation to a strategic component of Asia-Pacific real estate portfolios. Investors are increasingly attracted to India’s resilient occupier demand, expanding base of institutional-grade assets and favourable demographic profile.
Offices have re-emerged as the most targeted asset class globally, with 69% of investors planning allocations in 2026. However, capital remains selective, focusing on well-located, ESG-compliant and future-ready office assets. This trend closely mirrors India’s office market, where leasing activity continues to be driven by Global Capability Centres (GCCs), technology firms and domestic corporates, together accounting for nearly three-fourths of demand across major cities such as Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Pune and Chennai.
Beyond offices, living sectors have emerged as the second most preferred asset class globally, with 65% of investors targeting allocations. Although institutional rental housing and student accommodation are still nascent in India, Knight Frank notes that these segments present a sizeable medium- to long-term opportunity due to rapid urbanisation and a young, mobile population.
Industrial and logistics assets remain a high-conviction segment, supported by supply-chain reconfiguration, e-commerce growth and infrastructure investment—trends that are particularly pronounced in India. Retail assets have also returned to investor focus globally, with over half of respondents planning allocations, reflecting stabilisation and renewed interest in dominant, experience-led shopping centres.
The survey highlights a growing preference for joint ventures and capital partnerships, with 68% of investors—representing USD 94 billion of planned investment—open to collaborative structures in 2026. This approach is especially relevant in India, where local execution capability, governance and platform scale play a critical role in investment success.
Operational real estate segments such as data centres, healthcare and infrastructure are also gaining traction globally. In India, rising digital adoption, expanding healthcare needs and sustained public infrastructure spending are translating into growing investor interest across these sectors.
Knight Frank noted that interest rates remain the single most influential factor shaping investment decisions, followed by occupier demand and bond yields. While geopolitical risks persist, investors are increasingly willing to look beyond short-term volatility and focus on repriced assets and sectors aligned with long-term structural tailwinds.
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