India’s real estate sector is witnessing a strong revival in Q1FY26, driven by resilient demand in mid-premium and luxury residential segments, according to HSIE Research. Developers like Prestige Estates, DLF, and Sobha have reported record-breaking quarterly presales, signaling a robust recovery after FY25’s moderation due to high base effects, approval delays, and slower EOI-to-sales conversions.
The sector is now pivoting toward strategic consolidation, with developers prioritizing margins and execution over aggressive volume growth, setting the stage for a promising FY26.Prestige Estates led the charge with an unprecedented INR 121.3 billion in presales, a 299% year-on-year surge, fueled by premium launches in NCR and Mumbai, where 80% of units were absorbed. Collections reached a record INR 45.2 billion, reflecting disciplined execution. Sobha also shone, posting INR 20.7 billion in presales, driven by projects like Sobha Aurum and Marina One, which accounted for half its sales.
DLF’s Privana West in NCR, fully sold out at INR 110 billion, underscores sustained demand for prime locations despite an overheated market. Core markets like Bengaluru, MMR, and Pune are expected to outpace NCR, bolstered by recent interest rate cuts.The commercial segment is thriving, with office leasing gaining momentum and vacancies declining in prime business districts like Bengaluru, Pune, and Hyderabad. Gross leasing is up, driven by GCC expansion, BFSI, and flex-space operators, with 5-7% annual rental growth. Retail, however, faces headwinds, with consumption shifting toward travel and inflation impacting mid-segment growth. Still, organized retail maintains over 90% occupancy in Tier 1 cities, supported by fashion, F&B, and electronics. ESG-compliant assets and hybrid office formats are gaining traction, positioning developers with strong annuity portfolios for long-term gains.
While approval processes have improved through policy streamlining, global macro risks loom. Potential tariff wars could drive up input costs for steel and cement, squeezing margins. Global volatility may also impact MNC-driven commercial leasing, though strong domestic demand and limited speculative supply provide a buffer. HSIE forecasts aggregate revenue, EBITDA, and PAT growth of 18.8%, 15.4%, and -4.8% year-on-year, respectively, with an 85-basis-point EBITDA margin decline.For investors, HSIE recommends mixed-use developers with high FY26 growth potential and exposure to end-user-driven markets. Top picks include Oberoi Realty, Sobha, Prestige Estates (PEPL), and Mahindra Lifespaces, poised to capitalize on urban demand and strategic launches
