Mid-Segment Housing: The Next Big Leap in Indian Real Estate
Jitu Virwani, Chairman of Embassy Group, highlights the significant potential in mid-segment housing, despite the recent attention on the luxury market. He discusses the evolving real estate landscape and the role of generational change in driving growth.
Midsegment HousingLuxury MarketReal EstateUrbanisationIndian DevelopersReal Estate NewsJul 08, 2025
Virwani believes India’s real estate boom is still in its early innings, particularly as urbanisation accelerates. “Urbanisation is actually right now at a much slower pace than it should happen. And as that happens... it's just going to explode multiples on what has already happened,” he said.
On the luxury front, he acknowledged the rapid momentum in cities like Delhi, but said there’s still more to come. Citing Morgan Stanley estimates, he said, “If the 5 million [super-rich] are causing so much turmoil in the luxury market... can you imagine when these 20 million move into that segment, what would happen?” While the company will continue to build select luxury projects, Virwani said the real business lies in the next rung of aspiring buyers.
Aditya Virwani, MD of Embassy Group, highlighted the shifting nature of commercial real estate, especially with the decline of strata-sold, Grade B office space. “You're going to see that strata, Grade B office actually slowly die a slow death. And that's the way forward,” he said. He noted that Indian real estate has seen increasing institutionalisation, with large assets now being held by REITs and global investors.
Design and user experience have also come to the forefront. Jitu recalled appointing a lighting consultant as early as 1996, a move considered excessive back then but now seen as essential. “All of them built nice buildings, but nobody lit them up correctly,” he said.
The Virwanis agreed that generational change and global exposure are pushing Indian developers to adopt better practices. “Today, the industry is as international as anywhere else in the world,” said Jitu, pointing to the influx of global tech firms, GCCs, and internet companies as key drivers of that change.
When asked about the journey so far, Jitu reflected on the transformation of the real estate sector. “When I started on this journey, and I joined my father, people were making these smaller buildings, smaller offices, doing construction really the crude way. There was nothing comparable to what it is today, because today, the industry is as international as anywhere else in the world. We had all these Gujarati contractors all over the place. All developers were always thinking how to build an extra floor, and this, over time, just transformed into these large business parks and large developments in one location. And I think it's just the evolvement, or maybe the newer generation stepping in wanting to do things differently.”
Aditya, who has been with the Embassy Group for nine years, noted the significant changes in the landscape. “9 years have flown by, and even in those 9 years, I've seen a transformation of what Indian real estate was then and what it is now. And I think the big theme is the institutionalisation of the asset class, moving from these small offices that were strata sold, financed off-plan, to now very institutional large-ticket. We did the first REIT, these large assets that are owned by huge institutions, or REIT-type of trusts. I think the whole financing of the asset class has changed. I think the whole design aspect of the asset class has changed. And I only think it's going to keep evolving, and you're going to see that strata, Grade B office actually slowly die a slow death. And that's the way forward, actually, for this asset class.”
Looking ahead, Jitu expressed optimism about the untapped potential in the mid-segment market. “There are bigger industry stalwarts in this, but I don't think anybody has a clue what we’re in for, because urbanisation is actually right now at a much slower pace than it should happen. And as that happens, and I think for the younger generation, it's a huge opportunity where it is just going to explode multiples on what has already happened. People are always looking at the luxury market, but it's the mid-segment which has got such a big gap till today.”
Despite the recent surge in the luxury market, Jitu emphasized the viability and potential of the mid-segment. “It's quite viable, because, the luxury apartment market is x- it can be Delhi, Bombay, Bangalore, but there's a certain amount of luxury flats or apartments you can sell. But because we all come from affluent families, we feel that we travel around internationally, and we feel we need to build luxury apartments.”
Reflecting on the rapid growth of the luxury market, Jitu said, “I think there’s still more to come. Look at the size of the scale of our economy and the people. I mean, let's look at the percentage of rich. It may be a very small percentage, but, I was at a conference of Anarock and somebody from Morgan Stanley was giving a talk where he said that, there are like 5 million super-rich in India. And then the next level is a 50 million bracket, out of which 20 million will move into the super-rich bracket. So, if we go by Morgan Stanley statistics, if the 5 million are causing so much turmoil in the luxury market or expectation, can you imagine when these 20 million move into that segment, what would happen? So, I think India still has a lot to be seen in luxury. But, as a company, we would look at a level of luxury to a certain extent, but the next level is where we think the business is.”
Frequently Asked Questions
What is the next big opportunity in Indian real estate according to Jitu Virwani?
The next big opportunity in Indian real estate lies in mid-segment housing, as it has a significant gap and is poised for growth.
Why does Jitu Virwani believe the mid-segment housing market holds the real gap?
Jitu Virwani believes that while the luxury market has been grabbing attention, the mid-segment has a larger gap and is more viable and poised for growth.
What changes has the real estate industry seen over the past 30 years, according to Jitu Virwani?
The real estate industry has transformed from smaller, crudely constructed buildings to large business parks and developments, with a focus on international standards and design elements.
How is the commercial real estate market evolving, according to Aditya Virwani?
Aditya Virwani notes that the commercial real estate market is becoming more institutionalised, with large assets being held by REITs and global investors, and a shift away from strata-sold, Grade B office space.
What role do generational change and global exposure play in the real estate industry, according to the Virwanis?
Generational change and global exposure are pushing Indian developers to adopt better practices and international standards, making the industry as international as anywhere else in the world.
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