Indian commercial real estate is entering its most institutional phase yet. This is what the data looks like heading into FY27, and what it implies for fractional investors.
Office demand
Net absorption across the top 7 cities is on track to exceed 55 million sqft in FY26 — a record year. The driver is Global Capability Centres: captive global business services set up by large multinationals. GCC take-up has moved from ~30% of total absorption in FY21 to over 45% in FY26.
Supply
New Grade-A supply is healthy but concentrated in Bengaluru, Hyderabad and Pune. BKC and Gurgaon Cyber City remain supply-constrained, keeping rents on an uptrend.
Rent trajectory
- Bengaluru ORR: up 7–9% YoY.
- Hyderabad HITEC: up 6–8% YoY.
- Mumbai BKC: up 10–12% YoY (supply-constrained).
- Pune Kharadi: up 5–7% YoY.
- Gurgaon Golf Course Ext.: up 8–10% YoY.
Residential
Residential prices in the top 8 cities have risen in high single digits. New launches are skewed to premium and luxury segments. Residential rental yields remain structurally low (2.5–4%), so the case is mostly capital appreciation, not cash flow.
REIT and SM-REIT action
Listed REITs (Embassy, Mindspace, Brookfield, Nexus) are trading in a 6.5–7.5% distribution yield band. SM-REITs are starting to get their first listings under the 2024 framework. Expect a slow, steady flow of new SM-REITs over FY27–28.
What this means for investors
- Grade-A office fundamentals are genuinely strong; entry cap rates of 7.5–8.25% make sense today.
- Premium residential is a capital-appreciation story; expect yields to stay low.
- Micro-market matters more than ever — the gap between winning and losing corridors is widening.
- Liquidity will improve as SM-REITs scale; allocate with a 5–7 year view.
All figures are indicative and drawn from publicly available brokerage and industry research reports. Always verify against the underwriting memo of the specific asset you are subscribing to.