India GRI 2024 - Emerging Real Estate Asset Class Trends

Written by Isabella Toledo

India’s top real estate market players convened at India GRI 2024 to participate in high-level roundtable discussions, exploring major asset classes like residential and commercial real estate, as well as emerging markets such as warehousing, data centres, and retail.

GRI Club India’s comprehensive report provides an analysis of the trends, opportunities, and challenges identified during these sessions, offering sector-specific insights aligned with each market's unique dynamics.

Discover all the key takeaways in the full “India GRI 2024 - Emerging Real Estate Asset Class Trends” report.

Residential

India's residential housing market is undergoing a significant transformation, with affordable housing, once the sector's backbone, now accounting for just 15% of overall sales, a clear indication that shifting buyer preferences and broader economic factors are reshaping the industry.

In contrast, the luxury housing segment has experienced remarkable growth, transitioning from a niche market to a thriving category. Rising disposable incomes, aspirations for exclusivity, and a preference for premium living have driven this surge, prompting developers to launch high-end projects catering to affluent buyers. 

This duality in market trends raises a crucial question: can affordable and luxury housing coexist under a unified strategy, or do they require distinct approaches? The rising demand for upscale living presents an opportunity for developers to explore innovative solutions that balance accessibility with exclusivity, catering to diverse buyer needs while maintaining profitability in a dynamic market.

Offices

Domestic capital, led by family offices and HNIs/UHNIs, is emerging as a transformative force in India’s commercial real estate sector, increasingly challenging the traditional dominance of institutional investors. These players are leveraging innovative financial structures to facilitate high-yield, short-term investments that accommodate higher risk levels while fostering greater inclusivity in the market.  

However, family offices often encounter barriers when leasing prime office spaces, as institutional property owners typically prioritise tenants with strong financial credentials, such as global corporations.  

For developers, the growing demand for smaller, high-quality office spaces offers a lucrative opportunity to diversify their portfolios. Nevertheless, careful planning is required to balance the profitability of catering to smaller tenants with the returns associated with large-scale developments. 

(Credit: GRI Club)

Warehousing & Logistics

Over the past few years, ambitious road projects have transformed India’s logistics landscape, spurring growth in new warehousing hubs while disrupting traditional routes. Businesses are adapting to shifting infrastructure patterns, with rising demand for properties that comply with legal, environmental, and regulatory standards. 

The warehousing sector is also shifting towards efficiency and strategic planning. Companies are optimising storage needs with streamlined facilities, while larger players stand out by offering value-added services like industrial housing and park-level infrastructure. These innovations not only meet tenant demands but also create barriers to entry, giving institutional developers a competitive edge in an increasingly complex logistics ecosystem.

Data Centres

Between 2020 and 2023, the data centre industry witnessed unprecedented growth, fuelled by the rapid rise of cloud computing and AI. This surge prompted operators to acquire significantly larger plots to construct scalable facilities, marking a strategic shift where scalability and future-proofing became critical to accommodate the exponential growth projected over the next decade.  

While the sector has achieved remarkable milestones, its continued success hinges on sustained investment in advanced technologies and the development of large-scale, sustainable infrastructure. Addressing challenges such as adopting alternative ownership models and overcoming land constraints will be crucial in shaping the next phase of growth, balancing innovation, capital efficiency, and market demands.

Retail

Despite concerns during the COVID-19 pandemic about a shift to online shopping, physical retail has rebounded strongly, with malls evolving into experiential hubs that seamlessly combine traditional retail with dining, entertainment, and community-driven activities. This resurgence has been driven by the rapid urbanisation of Tier 2 and Tier 3 cities and the rise of mixed-use developments that integrate residential, workplace, and leisure spaces, catering to the diverse needs of modern consumers.

As retail strategies evolve, the integration of online and offline channels has emerged as a transformative force, blending the convenience of e-commerce with the tangible, curated experiences of in-store shopping. This omni-channel approach, supported by strategic partnerships with international and domestic brands, positions the retail industry to adapt to market shifts and maintain relevance in an ever-changing landscape. 
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Read all in-depth insights into Indian real estate’s unique sectors in the full “India GRI 2024 - Emerging Real Estate Asset Class Trends” report.