Public Participation in Real Estate: A Growth Story in India
India’s real estate market is undergoing a profound structural shift, with retail investors, Real Estate Investment Trusts (REITs), and global capability centres reshaping ownership and demand. Anshuman Magazine, the chairman and CEO of CBRE for India, South-East Asia, the Middle East, and Africa, has witnessed this transformation firsthand. Having joined CBRE in 1995, Magazine has seen the sector evolve from a largely unregulated, domestically-driven market to one that is now regulated, increasingly foreign direct investment (FDI)-led, and institutionally financed.
Today, the India business has grown from a handful of employees to over 16,000, offering a comprehensive range of real estate solutions, from strategic consulting and advisory to project management. In an interview with The Economic Times, Magazine reflects on the current state of the market, the factors driving demand, and the risks and opportunities that lie ahead.
2025 has been a record year for Indian real estate, with office absorption likely to reach around 84-85 million square feet, compared to 81.4 million square feet in the previous year. While the year-on-year increase may seem modest, the cumulative absorption over the last three years—approximately 220-225 million square feet—is a massive number by global standards. This absorption has been primarily driven by two segments: Global Capability Centres (GCCs) and flexible workspace operators.
Within the office segment, IT and technology-led services continue to dominate, but there is a growing role of manufacturing-linked back offices, engineering services, and captive centres. GCCs, in particular, are expanding aggressively. These are not third-party BPOs; they are captive, strategic centres for global corporations, which changes the quality and longevity of demand.
Investments in real estate have also kept pace with absorption. 2025 saw one of the highest real estate investment inflows, including land acquisitions, which have not been seen at this scale for many years. A major structural shift is underway, with ownership moving from developers to global institutions like Blackstone, Brookfield, GIC, and others. Now, the transition is from institutions to retail investors, largely through REITs and IPOs. Public participation in real estate has increased significantly, with retail investors becoming meaningful stakeholders in residential developer IPOs, commercial, and flexible workspace platforms. This is a very healthy sign for the market.
REITs have been critical in this transformation, providing a clear exit mechanism for global funds and offering retail investors diversification beyond equities and gold. REITs give retail investors access to income-producing real estate, which was previously inaccessible. We can expect more REITs in various asset classes, including industrial, warehousing, retail, and others, as rental yields mature.
Beyond offices, three sectors gained momentum in 2025 and will continue to show growth over the next few years. Healthcare, including hospitals, diagnostics, and clinics, has seen investment at every level. Education real estate, encompassing K-12 schools, colleges, training centres, and foreign universities setting up campuses in India, particularly from Australia and the UK, has also seen growing participation from private capital and innovative operating models. Hotels and hospitality have also seen significant room additions, driven by office expansion, airports, business parks, and townships.
Large developers are now thinking in terms of self-sustained ecosystems. Wherever there are large office developments, the first two social infrastructures that follow are schools and hotels. These are essential, and many developers prefer to control these assets themselves because they have a captive audience. This model strengthens townships and improves residential demand around them.
The pipeline looks strong for 2026, both in terms of demand and supply. However, supply will be uneven. In cities like Mumbai and Gurgaon, supply constraints in prime office locations are already pushing rentals upward. India could see rental growth at a time when some global markets are under pressure.
Globally, uncertainty affects decision-making. Geopolitical tensions don’t necessarily stop demand, but they delay decisions. Inflation and interest rates remain the two biggest macro variables. India has managed both reasonably well so far. If interest rates soften further, that would be a positive development. However, much depends on global factors such as oil prices, currencies, and economic conditions in the US and Europe.
AI is a major disruptor, faster and more impactful than anything we’ve seen before. Some roles will become redundant, but new roles will also be created. The key challenge for India is continuous upskilling. India’s strength lies in its scale of skilled talent. While many countries have talent, none match India’s depth and volume. However, skill development must keep pace with technological change.
The next big inflection point for Indian commercial real estate is talent and skills. Real estate follows talent, not the other way around. Companies will continue to come to India if it remains cost-competitive and skill-rich. Manufacturing must scale up alongside services. The good news is that growth is seen in electronics, auto, and industrial manufacturing, supported by PLI schemes and infrastructure development. Data centres are another long-term opportunity, though they are capital-intensive and technically complex. Growth will be steady, not explosive, but it will expand beyond Mumbai and Chennai over time.
From a real estate and economic standpoint, the effectiveness of the Union Budget 2026 will depend on how well it stimulates consumption while sustaining the government’s strong push on infrastructure. Measures that improve housing affordability, through tax incentives, easier financing conditions, and support for schemes like PM Awas Yojana, can significantly revive end-user demand. At the same time, making REIT structures more tax-efficient will help attract long-term institutional capital into commercial real estate, particularly as demand continues to be driven by global capability centres and India’s services sector.
On the supply side, continued and higher allocations to infrastructure—roads, metros, airports, and logistics—are critical as they improve connectivity, unlock new land for development, and reduce structural bottlenecks, including high land costs. Manufacturing and logistics real estate will also benefit if the Budget builds further on the PLI framework, as India cannot rely on services growth alone. For affordable housing, deeper public-private partnerships and targeted incentives for developers are essential to make projects viable amid rising land and construction costs. Ultimately, while the Budget can provide the fiscal direction, timely implementation of infrastructure projects will be the key determinant of sustained growth across real estate and the wider economy.
