India’s real estate industry is undergoing a significant structural shift, moving away from its traditional reliance on family funding towards a more institutionalised model closely linked to global capital markets.
The change is being driven by increased participation from private equity investors, family offices, and listed vehicles such as Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), according to industry experts.Speaking at the Maharashtra NextGen conference, Niranjan Hiranandani, Chairman Emeritus of NAREDCO Maharashtra, described the sector as being at an “inflection point”.
He highlighted India’s urbanisation trajectory, which is projected to rise from 35% to nearly 50% by 2047, fundamentally altering demand patterns.”The industry has already transitioned from reliance on family funding to more institutionalised capital through private equity and REITs and is steadily evolving into a global asset class,” Mr Hiranandani said. However, he noted that challenges around land availability, pricing, and financing remain.
Market observers say real estate is now viewed as a more diversified investment class. Developers are expanding beyond conventional residential and commercial projects into integrated townships and specialised areas such as senior living, warehousing, and asset management platforms.
Vikas Jain, President of NAREDCO Maharashtra NextGen, said the sector had seen a “remarkable transformation” over the past decade, with growing investor confidence.Family offices, once cautious, are now actively investing in premium segments including branded residences and hospitality assets, treating them as long-term holdings.
The REIT sector has strengthened, broadening access for both institutional and retail investors. The planned introduction of small and medium REITs (SM REITs) in 2025 is expected to enable fractional ownership and unlock monetisation opportunities worth between Rs 67,000 crore and Rs 71,000 crore.Sustainability is also rising up the agenda, with greater focus on environmental, social and governance (ESG) standards, though clearer benchmarks are still needed.
Regulatory changes, including the Real Estate (Regulation and Development) Act (RERA) and Goods and Services Tax (GST), have improved transparency and boosted confidence. Foreign capital now forms a substantial part of institutional flows.Supported by rising incomes, urbanisation, and deeper integration with global finance, India’s real estate sector is poised for continued expansion with a more diversified and institutional capital base.
