Why Real Estate Is Emerging as India’s Most Strategic Asset Class

By Roshy Chhillar, Director, Landmark Group

The shift is already visible in how capital is quietly repositioning itself. Over the past 18-24 months, there is an acceptance that real estate is where returns are high when every other avenue is marked by volatility.

On the structural side, the numbers, though uneven across sources, are directionally consistent. According to Knight Frank India, residential sales across the top eight cities crossed 3 lakh units about three years ago, which is among the highest in a decade. The unsold inventory also declined steadily. The numbers from then on have been consistent. According to Knight Frank India, residential sales in India’s top eight cities reached 3.48 lakh units in 2025, with premium homes accounting for 50% of the total. JLL India reports record office leasing of 83.3 million sq. ft. in 2025, while CBRE South Asia estimates a record 8.9 million sq. ft. in retail leasing.

Housing, for instance, is no longer just a consumption story. There is a subtle but noticeable shift in buyer intent, end-users are still dominant, but investors are returning without the speculative aggression of the previous cycle. Prices are rising again, but not irrationally, at least not yet.

At the same time, affordability, by most formal indices, has improved. Anarock has suggested that affordability levels in major cities are near their best in a decade due to income growth outpacing price increases. Commercial real estate is also growing. With the emergence of REITs, retail investors have, for the first time, gained structured access to Grade A office assets. According to NSE data, India’s listed REITs have consistently delivered yields in the range of 6-8%, with periodic capital appreciation layered in. Global firms have also continued to expand, but what is more telling is the domestic corporate appetite for space.

One keeps hearing about hybrid work diluting office demand. And yet, vacancy levels in prime micro-markets remain tight. Much of this resilience is being driven by sustained demand for Grade-A office spaces, where global capability centres, domestic corporates, and institutional players continue to prefer.

Retail, on the other hand, is moving almost quietly. CBRE noted that high streets and premium malls have seen rental escalations in the last year, something that would have seemed optimistic not too long ago. Further, consumption is deepening, and organised retail is capturing a share of that shift.

Developers, for one, are building differently. There is more discipline in launches, more sensitivity to absorption rates. The excesses of the last cycle have left a residue of caution. And buyers, particularly in housing, are asking different questions now. Not just about price or location, but about execution credibility, balance sheet strength, and even governance. RERA has done more than regulate; it has altered the tone of engagement.

Some of this formalisation is measurable. According to MoHUA and RERA disclosures, project registrations and compliance levels have steadily improved across states, bringing a degree of transparency that was previously absent. But the more meaningful change is subtler, the assumption that delays and opacity are inevitable is slowly eroding.

It would be easy to attribute this entire shift to macro tailwinds, urbanisation, infrastructure build-out, and rising incomes. At the same time, India’s young population is rising, and infrastructure, from expressways to metro networks, is compressing distances in ways that directly feed into real estate values.

Against this backdrop, real estate’s rise, even though it is not a liquid asset, has been steady, turning it into an income-generating asset, and anchored in a demographic dividend. While prices in certain micro-markets are beginning to stretch, land costs are rising, but there is an exuberance, cheering the sector.

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