HNIs Boost Real Estate Investments: Key Drivers and Trends

High-net-worth individuals (HNIs) in India are increasing their allocation to real estate. Industry executives say real estate now accounts for 30-35% of HNI investable wealth, excluding primary residences.

D Kishore Reddy, Chairman and Managing Director, Mana Projects, said affluent investors are gravitating toward tangible assets in uncertain times. “Prime real estate is seen as a store of value and a hedge against financial market fluctuations,” he said, adding that surveys show over 50% of Indian HNIs already allocate more than 20% of their portfolios to real estate.

According to the India Sotheby’s International Realty Luxury Residential Outlook Survey 2025, 62% of HNIs plan to invest in luxury residential real estate over the next 12-24 months, up sharply from a year ago. JLL data also show that homes priced at ₹1 crore and above now account for more than half of residential sales across India.

While luxury housing remains in demand, investor preferences are becoming more sophisticated. Reddy noted that HNIs and NRIs are driving 80-85% year-on-year growth in the ₹4 crore-plus housing segment across major cities, with purchases viewed as a blend of lifestyle enhancement and long-term wealth preservation.

Amlan Dutta, Vice President – Sales & Strategy at Trehan Iris, said buyers are shifting away from traditional luxury homes toward assets that offer income visibility. “HNIs are favouring well-managed, resilient assets that deliver steady cash flows along with long-term appreciation,” he said, adding that tenant credibility, lease tenure, and escalation structures have become central to investment decisions.

Branded residences are emerging as a preferred format within the luxury segment. According to Knight Frank’s Residence Report 2025, India ranks sixth globally in live branded residence projects, with Mumbai, Delhi NCR, Bengaluru, and Pune as key hubs. Yogesh Awasthi, President – Strategic Initiatives at Jenika Ventures, said branded residences appeal to younger, globally exposed investors. “They offer curated living, wellness amenities, and hotel-like services, and nearly 20% of buyers are now under 40,” he said.

Abhishek Trehan, Executive Director at Trehan Iris, pointed to a parallel rise in wellness-led housing, particularly in NCR. “Luxury home sales in NCR grew 9% in the first half of 2025, with Gurugram accounting for nearly 91% of high-end transactions,” he said, noting that buyers are prioritising health, air quality, and integrated wellness over price alone.

Rental income is shaping HNI investment decisions, with investors adopting a professional, data-driven approach to property selection. Reddy said investors are actively comparing yields across asset classes. “Typical residential rentals offer 2-4% returns, prompting many HNIs to look at grade-A offices, high-street retail, co-living, and student housing, where yields can reach 6-10%,” he said.

Investors also factor in vacancy risk, EMIs, taxes, and fixed rent escalations of 3-5% to protect cash flows. Awasthi added that pre-leased commercial properties are gaining popularity due to higher and more stable returns. “Grade-A office and retail assets can deliver 9-15% net yields, significantly higher than residential properties, while long-term leases of 5-10 years help minimise vacancy risk,” he said.

Commercial real estate performance, particularly in NCR, has further reinforced HNI interest. Ashish Sharma, AVP Operations at Brahma Group, said office leasing in NCR touched 7.2 million sq ft in H1 2025, a 27% year-on-year increase, with Gurugram contributing nearly 65% of total leasing. “The demand is firmly tilted toward high-quality, sustainable, and technology-enabled grade-A offices,” Sharma said, adding that infrastructure upgrades and rising rentals are likely to support further growth into 2026.

Rajat Khandelwal, Group CEO of Tribeca Developers, said luxury real estate continues to attract HNI capital even amid moderate interest rates. “Prime luxury assets have delivered 3-4 times appreciation over the past decade, and select developments have seen nearly threefold price growth since launch,” he said. Khandelwal added that evolved investors also recognise the advantage of leverage unique to real estate, which can significantly enhance return on equity. At the same time, he said rental income is becoming important, driving interest in professionally managed, pre-leased assets that offer stable, inflation-beating cash flows.