Indian Real Estate: A Global Asset Class on the Rise

Over the last 20 years, the Indian real estate market has seen significant growth and transformation, driven by structural reforms and rising institutional participation, making it a stable and attractive investment for both domestic and global investors.

Real EstateReraGdp GrowthInfrastructureReitsReal Estate NewsAug 05, 2025

Indian Real Estate: A Global Asset Class on the Rise

Real Estate News:Once seen as opaque and risky, the Indian real estate sector has undergone a remarkable transformation over the past two decades. According to Rohit Kishore, CEO of Hero Realty, a combination of sustained economic growth, landmark regulatory reforms like RERA and GST, and rising institutional participation has reshaped the landscape—turning real estate into a credible, stable, and globally relevant investment destination.

In this exclusive conversation, Kishore explains how infrastructure expansion, urbanization, and transparency measures have de-risked the sector and positioned it as a compelling asset class for both domestic and global investors.

Over the last 20 years, the Indian real estate market has witnessed robust growth, underpinned by a dynamic interplay between structural reforms and sustained demand. Together, these forces have transformed the sector into a stable and attractive asset class for both domestic and global institutional investors. On the demand side, consistent GDP growth of over 6% annually has fueled a steady rise in the need for both commercial and residential real estate. Urbanization, rising income levels, and an expanding middle class have further deepened this demand, creating a strong foundation for long-term growth.

Simultaneously, timely government reforms have played a pivotal role in boosting investor confidence. Landmark policy initiatives such as the Real Estate (Regulation and Development) Act (RERA), Goods and Services Tax (GST), and the introduction of Real Estate Investment Trusts (REITs) have brought transparency, regulatory oversight, and liquidity to the sector. These reforms have significantly de-risked investments, making entry and exit more secure and predictable.

In addition, India's prudent fiscal and monetary policies have contributed to macroeconomic stability, offering global investors a more predictable outlook for the Indian rupee and easing concerns around currency volatility. The success of these combined factors is exemplified by Blackstone, one of the earliest global funds to enter the Indian market nearly two decades ago. Today, Blackstone is a major player in four out of the five listed REITs in the country. The fifth is backed by Brookfield, another global powerhouse in real estate investments. This level of institutional participation underscores the sector's maturation and global relevance.

New infrastructure projects and better connectivity are also changing real estate demand patterns in non-traditional locations. Expressways like the Dwarka Expressway, Delhi–Mumbai Expressway, and UER-II drastically reduce travel times and open up land-rich areas like Sohna, Dwarka, Bahadurgarh, Kundli, and Greater Noida West. Buyers get better access to urban centers while enjoying lower entry costs, creating a pull factor for residential, plotted, and affordable housing projects. Real estate near metro stations often sees 20–30% higher capital appreciation and rentals, making it attractive for both end-users and investors. For example, Noida Sector 137–142 and Huda City Centre–Cyber City belt saw a rise in premium apartments due to metro accessibility.

The Delhi–Mumbai Industrial Corridor (DMIC), Amritsar–Kolkata Industrial Corridor, and upcoming Multimodal Logistics Parks in Dadri, Dholera, and Panipat drive employment. This results in floating populations and demand for rental and mid-segment housing, catalyzing integrated townships and co-living developments. For instance, Neemrana, once a sleepy town, is now a hotbed for Japanese and Korean investments and has witnessed a boom in plotted land sales. Areas with a convergence of expressways, metro, and job zones—like the Dwarka–Gurugram–Manesar belt, Noida–Greater Noida, and Kundli–Sonipat—support walk-to-work ecosystems. This fuels Grade-A office spaces, retail, and social infra (schools, hospitals), making them self-sustaining micro-cities.

Primarily, our focus remains on tier-1 cities, where we see robust demand and long-term growth potential. However, we are also open to key tier-2 cities like Lucknow, the Tri-City region (Panchkula, Mohali, Chandigarh), and Jaipur, as well as satellite towns around the NCR such as Sonipat, Panipat, and Meerut.

All parts of India are witnessing rapid growth and infrastructure development seems to be driving it across various market tiers and town classes. The real estate industry is perhaps one of the most important stakeholders in this overall India growth story. Customers are being increasingly aspirational, seeking high-quality and versatile products that meet emergent needs of families, big and small. Therefore, the opportunities for the real estate industry are limitless. From a residential real estate point of view, there are still far too few families who own their own home—something that in part has also been a result of limited, good quality supply.

From a commercial and retail point of view, with cities growing and developing across tiers, there is a massive requirement for both office and recreation spaces. Out of the entire pie, we have been and will continue to remain focused on northern Indian markets. We are already invested in Plotted and GH developments. Over the short to medium term, the focus would be to strengthen our presence in those segments across northern Indian markets. That said, there are some developments in the retail segment underway even today, but dedicated focus on Retail and Commercial as asset classes is currently reserved for Phase 2 of our growth.

Both India and Bharat are growing all round. There are enough opportunities for all segments to grow—from affordable to super-luxury given the diversity of our country and the extremely low levels of home ownership currently. Opportunities need to be identified by markets and the segments within each that present relatively greater opportunities to grow. So, every developer should have the capability to present and operate in segments that are relevant in the markets they choose to operate in rather than basing their decisions only based on the segment they want to play in. Mid-segment always has more preference and that’s why it always has a fair share of the real estate portfolio.

Residential demand remains resilient in early 2025, with market recovery evidenced by a slight uptick in sales in June, the first year-on-year rise in twelve months. Office REITs continue to outperform, attracting strong interest from both domestic and global investors, underlining rising confidence in commercial real estate as a wealth-preservation asset class.

Frequently Asked Questions

What are the key factors driving the growth of the Indian real estate market?

Key factors include sustained economic growth, landmark regulatory reforms like RERA and GST, and rising institutional participation. Urbanization, rising income levels, and an expanding middle class also contribute to the demand for both commercial and residential real estate.

How have government reforms impacted the real estate sector?

Government reforms such as RERA, GST, and the introduction of REITs have brought transparency, regulatory oversight, and liquidity to the sector. These reforms have de-risked investments, making them more secure and predictable for both domestic and global investors.

What role do infrastructure projects play in shaping real estate demand?

Infrastructure projects like expressways and metro connectivity reduce travel times and open up land-rich areas, creating a pull factor for residential, plotted, and affordable housing projects. These projects also drive employment and demand for rental and mid-segment housing, leading to the development of integrated townships and co-living developments.

Which cities and regions are showing the most potential for growth in the real estate sector?

Tier-1 cities such as Delhi, Mumbai, and Bangalore are seeing robust demand and long-term growth potential. Key tier-2 cities like Lucknow, the Tri-City region (Panchkula, Mohali, Chandigarh), and Jaipur, as well as satellite towns around the NCR, are also showing significant potential.

What is the outlook for residential versus commercial real estate in the current financial year?

Residential demand remains resilient, with a slight uptick in sales in June 2025, the first year-on-year rise in twelve months. Office REITs continue to outperform, attracting strong interest from both domestic and global investors, highlighting rising confidence in commercial real estate as a wealth-preservation asset class.