Global rush for real assets: Why India holds the winning hand

There are moments in the global markets when the signals become too significant to ignore. For India, this appears to be one of those times.

Now the world's fourth-largest economy, India is on track to become the third largest by 2029. This growth has been fuelled by strong domestic consumption, which made up 57% of GDP in 2024, and a demographic dividend that continues to deepen. Household incomes have risen by 7.8% annually over the past decade, with projections suggesting an acceleration to 9.1% over the next 10 years. These trends point to greater spending power and rising aspirations, both of which support demand for high-quality real estate.

India's working-age population is also expanding, and its labour force is becoming more educated and digitally capable.

This is attracting both local companies and multinationals, many of which are establishing global capability centres that are evolving into innovation hubs. As a result, demand for commercial real estate is growing steadily in cities like Bengaluru, Delhi, Mumbai, Pune, and Hyderabad.

While many global office markets are still adjusting to post-pandemic dynamics, India's commercial real estate sector has shown resilience. Office rental yields in major cities have averaged 8.7%, among the highest globally. In 2024, the country's office rent growth hit a 14-year high and saw record levels of net absorption.

International capital is responding to these signals. Japanese institutional interest in India has grown, as seen in Hines' trophy office joint ventures involving firms like Mitsubishi Estate, Sumitomo Corp and Daibiru.

India's living sector is also evolving. Urbanisation, rising incomes, and changing household preferences have driven demand for larger, higher-quality homes with better amenities. In parallel, the industrial sector is seeing momentum from growing domestic consumption, rapid ecommerce expansion, and the "Made in India" initiative, particularly in local tech manufacturing.

Ecommerce has accounted for around 9% of retail sales in India and is forecast to grow at about twice the rate of offline retail. Beyond supply chain reconfiguration, domestic manufacturing is emerging as a structural growth engine.

These shifts are unfolding against a backdrop of powerful underlying forces - deglobalisation, demographic pressure, energy insecurity, and political bifurcation - that have been building over time like tectonic shifts.

As these forces surface, the global landscape is transforming, becoming more fragmented and localised. India, with its scale, stability, and domestic growth engine, may be well positioned within this new paradigm.

That said, real estate remains a local business. In India, regulatory frameworks, land acquisition processes, and development timelines can vary widely. Success often depends on strong local partnerships and the ability to manage projects from the ground up.

The author is Managing Partner & Global CIO at Hines. He will be speaking at The Economic Times World Leaders Forum in New Delhi.


(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)