Aayush Puri of ANAROCK Channel Partners highlights India’s real estate shift to fundamentals, with Bengaluru, Gurugram, and Hyderabad leading in 2026.
India’s real estate market is entering a more disciplined, fundamentals-driven phase, offering differentiated opportunities for investors in 2026, according to Aayush Puri, Head of ANAROCK Channel Partners (ACP) & ANACITY.
Puri highlighted that residential price growth across major cities has averaged high single digits annually over the past two years, but rental yields remain modest, at roughly 2–4% in most metros.
“This means residential returns are still largely appreciation-led rather than income-led,” he said.
Premium and upper-mid residential segments in cities such as Bengaluru, Gurugram and Hyderabad are currently outperforming, driven by supply discipline and strong end-user demand.
In contrast, commercial real estate is emerging as a more predictable income avenue. “Grade A office assets typically generate rental yields in the 6–8% range, supported by long-term leases, annual escalations of around 5%, and sustained demand from global capability centres and technology firms,” Puri noted.
Logistics and warehousing are also structurally attractive, boosted by the growth of e-commerce, manufacturing expansion, and supply chain localisation.
He added that commercial properties and listed REITs offer investors stable cash flow and lower volatility compared with residential, although they require higher capital outlay.
When asked about the distinction between buying property for personal use versus as an investment, Puri emphasised the importance of strategy.
“A primary residence delivers lifestyle stability, inflation hedging, and long-term capital appreciation, but from a pure financial perspective, residential rental yields remain below typical home loan interest rates in many cities,” he explained.
With mortgage rates hovering in the 8–9% range, leveraged residential investments work best for buyers with conviction in long-term price growth and a holding horizon of 7–10 years.
For investors focused on income and liquidity, Puri suggested commercial real estate or REIT exposure.
“Real estate should form a strategic but not dominant allocation within a diversified personal finance portfolio,” he said.
Younger investors may prioritise liquid growth assets such as equities, while established investors can selectively allocate to income-generating property.
Looking ahead, Puri identified cities and property segments with long-term wealth potential. “Bengaluru continues to benefit from sustained office demand and residential absorption near tech corridors. Gurugram and select NCR micro markets are seeing strong premium housing demand, while Hyderabad and Pune offer balanced affordability and rental demand,” he said.
Beyond offices, logistics, warehousing, mixed-use developments, and township projects are gaining traction, reflecting India’s evolving urban lifestyles and industrial growth.
He cautioned, however, that investors must remain wary of over-leverage, micro-market oversupply, execution delays in under-construction projects, and liquidity constraints. “Real estate in India is highly location-specific, and performance can vary significantly even within the same city. A disciplined, research-led approach and longer holding horizon remain essential for wealth creation,” Puri added.
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