Investors Monitor Real Estate Demand, Costs, and AI Impact
Global investors in Indian real estate are closely tracking demand trends, rising input costs, and the potential impact of artificial intelligence on the IT sector over the next 18–24 months, as they assess deployment and returns.
“What we watch very carefully is demand across residential, commercial, retail and logistics,” said Shravan Sharma, managing director, real estate, Blackstone, at a Naredco Maharashtra NextGen event on Thursday. Demand remains the key variable shaping investment decisions, he said.
Investors are also reassessing project viability amid rising costs. With oil prices elevated and steel prices having risen sharply over the past six months, margins require closer scrutiny, Sharma said.
Blackstone, among the largest investors in India with about $50 billion exposure split between real estate and private equity, has indicated plans to scale up its investments in the country over the coming years.
AI Wildcard
Suresh Maramreddy, managing director at Apollo Global Management, said investors are evaluating how higher commodity costs will be passed on. “We would like to see how cost increases translate,” he said. He added that the impact of AI on IT-driven office demand remains a key monitorable. “Many cities such as Gurgaon, Pune, Bengaluru and Hyderabad are built around IT demand. So far, it has not impacted, but it needs to be watched,” he said, referring also to recent layoffs.
Margin Squeeze
Ankur Gupta, managing director and head of investments at Hines India, said cost pressures are not fully reflected in prices. “What is happening is not fully priced in. It could have a rubber-band effect on the economy,” he said, adding that capital allocation decisions will depend on how these uncertainties evolve.
Crisil has estimated that residential sales growth, in value terms, could decline 5–7% in FY26 due to stagnant demand amid elevated prices and delayed project launches.
Ashank Kothari, managing director at Brookfield Real Estate Group, said market noise remains high. “The biggest risk is losing discipline and setting benchmarks that create more noise,” he said.
Nishant Kabra, managing director, investment and debt advisory at JLL India, said investors will also track global liquidity, interest rates and currency stability. “The trajectory of global interest rates will be critical,” he said, adding that easing rates could accelerate capital flows. He added that rupee volatility and hedging costs are increasingly factored into returns, while a maturing Reit market is improving exit visibility for investors.
