India’s real estate sector poised for sustained growth

India’s real estate sector has reached a pivotal milestone, with developers acquiring over 3,093 acres of land across 149 transactions valued at Rs54,818 crore in 2025, a 32% year-on-year increase. This momentum is expected to unlock approximately 229 million sq. ft. of development over the next two to five years, according to a survey by international property consultant JLL.

JLL research reveals a distinct investment pattern: Tier I cities attracted 89% of capital required for land acquisition while accounting for just 52% of total land area purchased. Meanwhile, Tier II cities received only 11% of the total investments despite representing 48% of land transactions in terms of area acquired.

The strong momentum has continued into 2026, with approximately 900 acres acquired across key markets in Q1 2026, valued at nearly Rs18,000 crore. This reflects strong developer confidence and sustained demand for land.

Developing these newly acquired land parcels in 2025 will require an estimated Rs92,000 crore + in total construction capital. Of this substantial investment, external financing needs are projected to exceed Rs52,000 crore over the medium term. Meeting this significant capital requirement will likely necessitate a diversified funding approach to support the ambitious development pipeline across multiple real estate asset classes.

“As traditional banking channels face regulatory constraints and evolving risk appetites, this substantial capital requirement presents compelling opportunities for AIF and private credit providers to deploy innovative, tailored financing solutions that address diverse funding needs across project lifecycles. With strong demand fundamentals and a growing financing ecosystem, India’s real estate sector is poised for sustained growth, a momentum that has carried into 2026, with approximately 900 acres already acquired across key markets in Q1 2026,” said Lata Pillai, Senior Managing Director & Head of Capital Markets, JLL India.

The top seven cities continue to dominate the real estate investment landscape and projected to absorb approximately 89% of the total capital required to construct on these newly acquired land parcels. Meanwhile, emerging urban centers are gaining traction, with Tier II and III cities witnessing land acquisitions totaling 1,475 acres during the year. However, despite substantial land banking activity in these emerging markets, they account for only 11% of total estimated construction costs.

Residential development emerges as the primary growth engine, with developers allocating 78% of acquired land for housing projects, totalling 2,398 acres and requiring an estimated Rs72,000 crore+ in construction cost.

Office development represents the second-largest segment with an estimated capital requirement of approximately Rs8,700 crore+ (~10% of total capital required for construction), indicating robust corporate expansion and continued demand for modern workspace solutions.

The analysis of India’s land supply landscape reveals that, individual landowners constitute the backbone of India’s developer land acquisition market, accounting for 65% of total area transacted across 62 deals, reflecting the fragmented nature of land ownership across various markets.

The sector’s outlook remains highly favourable, supported by robust demand fundamentals, strategic developer positioning across geographic markets and an increasingly sophisticated financing ecosystem that positions India’s real estate sector for sustained growth through the decade. This unprecedented financing requirement presents compelling opportunities for AIFs, banks, and institutional investors to deploy innovative financing solutions and support India’s real estate growth trajectory through strategic first-mile acquisition financing and last-mile completion funding.

We are due to sell our deceased father’s property in India with two legal heirs and I am located in the Gulf. In the current situation, I am unable to travel. Can a power of attorney resolve the situation to close the deal? Navin Jagesha, Sharjah.

Yes. You will have to get attestation of the specific power of attorney in the Gulf with the Indian consulate. You may grant PoA to either of the two legal heirs in India for the purpose of executing and registration of sale deed. Once it is received in India, it has to be stamped and signed with the appropriate stamp duty.

My relative is planning to gift the commercial property located in Pune. She is a PIO and settled in Canada. Are there any restrictions in this regard? Ram Pravesh, Dubai.

There are no restrictions at all as the Reserve Bank has given general permission to Persons of Indian Origin to transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India, who is a citizen of India or to a person of Indian origin resident outside India.