India recorded the highest real estate yields across every major asset class in the Asia Pacific region in Q1 CY 2026, while investment volumes surged 189 per cent year-on-year to $2,295.19 million — up from $839.85 million in the same period a year earlier, according to a report by global real estate consultancy CBRE released on 21 May 2026. The figures underscore India's emergence as the region's most yield-competitive destination for institutional capital.

Cap Rates That Outpace the Region

According to the CBRE report, India's capitalisation rates — a key measure of real estate return — consistently exceed those of every other Asia Pacific market across office, retail, logistics, hotels, and student housing sectors, in some cases by as much as 320 basis points.

Grade A office cap rates in India's core central business district locations range from 7.50 per cent to 8.40 per cent, compared with 3.25 per cent to 3.80 per cent in Singapore and 2 per cent to 3 per cent in Tokyo. Student housing yields in India stood at 8.50 per cent–9 per cent, approximately 320 basis points above the next-highest market, Australia. Institutional-grade logistics cap rates in India ranged from 7.15 per cent to 7.75 per cent, around 115 basis points ahead of second-ranked Vietnam, where rates stand at 6 per cent–7 per cent.

India's Investment Volume Jump

India ranked second in the region for overall investment volume growth in Q1 2026, trailing only Singapore, which led with a 364 per cent year-on-year increase. India is also named among the top three preferred markets for Grade A office investment enquiries in Asia Pacific, alongside Singapore and Japan.

The report further identified India as one of the top markets for real estate debt interest in Asia Pacific — a signal, according to CBRE, of maturing capital markets and deepening institutional participation.

What the Industry Said

Anshuman Magazine, Chairman and CEO — India, South-East Asia, Middle East and Africa at CBRE, attributed the momentum to structural economic drivers. 'We are seeing genuine, broad-based demand across sectors driven by India's economic fundamentals, its growing corporate base, and a young, consumption-led population,' he said.

Magazine added that previously cautious global investors are now actively seeking to deploy capital in India. 'We expect this momentum to strengthen further as more institutional-grade products come to market,' he said.

Why Higher Yields and What Comes Next

The report contextualised India's elevated cap rates as a reflection of its still-evolving institutional participation and price discovery processes, combined with the natural yield premium of a high-growth emerging economy — characteristics that distinguish it from mature markets such as Japan, Singapore, and South Korea.

Sustained interest from domestic institutions, family offices, and global capital markets players — channelled through direct acquisitions, REITs, and structured debt instruments — is driving the broad-based demand, the report noted. As more institutional-grade supply enters the market, analysts expect yield compression over the medium term, even as absolute returns remain attractive relative to regional peers.