Reality check gets India on investors' realty list

Some investors are allocating capital into Indian residential assets not only for investment but also as lifestyle or family assets.

Escalating geopolitical tensions in West Asia are prompting investors with exposure to Dubai’s real estate market to reassess their portfolios.

And, in this rejig, India is emerging as a stable destination for capital investment and long-term growth.

India a stable investment destination

While Dubai has long been viewed as a tax-efficient, high-yield market attracting global capital, the city is caught in the crossfire of the West Asia war.

“We are seeing a gradual increase in enquiries from non-resident Indians (NRIs) and investors based in West Asia who are looking to diversify their portfolios by adding exposure to India,” said Sachin Sawrikar, founder and managing partner at Artha Bharat Investment Managers.

“The recent escalation of geopolitical tensions in West Asia has reintroduced regional risk into an asset class that was earlier perceived as insulated from conflicts,” said Vijay Agrawal, managing director (MD) and sector lead for infrastructure at Equirus Capital.

The uncertainty is prompting many investors, particularly NRIs based in West Asia, to re-evaluate geographic concentration in their property portfolios.

What experts say

Experts believe the investor cohort may also extend beyond NRIs, who are expected to remain the most active segment due to their familiarity with the Indian market.

“The United Arab Emirates (UAE) citizens, family offices and regional investment groups may also consider India as part of a broader emerging-markets allocation strategy,” said Bhavik Vora, partner at Grant Thornton Bharat.

Industry executives say the combination of structural housing demand, economic growth and regulatory maturity is positioning India as a complementary real estate destination for investors navigating global uncertainty.

“India offers macro stability, domestic demand depth and long-term appreciation potential, which become particularly valuable during periods of geopolitical uncertainty,” Agrawal said.

Currency dynamics are also playing a role.

“The depreciation of the rupee has effectively increased purchasing power for NRIs earning in foreign currencies such as the US dollar or UAE dirham.

"This makes Indian real estate comparatively more attractive,” said a Delhi-based broker.

Market watchers add...

However, market watchers add that the shift is less about exiting Dubai and more about diversification.

Conversations now include not just real estate but also private markets and other India-focused investment strategies.

Sawrikar said the expansion of global capability centres (GCCs), data centres and logistics infrastructure is creating sustained demand for office space and housing in cities such as Bengaluru, Hyderabad, Mumbai and Pune.

Alternative assets

He added that investment managers are also seeing interest in alternative assets that provide geographic diversification.

“Our recently launched physical gold fund has attracted attention from investors interested in holding gold custodied in India.

"This is adding another layer of diversification to their portfolios in terms of where the asset is physically stored,” he said.

With India’s property market gaining credibility over the past decade with reforms such as the Real Estate Regulatory Authority (Rera), developers say regulatory clarity, along with strong domestic demand, is helping position the country as a long-term investment market rather than a speculative cycle.

Indian cities drawing investor interest

Cities such as Mumbai, Bengaluru, Hyderabad and Delhi-NCR are among the key markets drawing investor interest due to their economic growth prospects.

“In the present geopolitical environment, investors often reassess their portfolios and consider greater geographic diversification,” said Aakash Ohri, MD and chief business officer at DLF Home Developers.

He added that DLF has observed a steady rise in enquiries from overseas investors exploring real estate opportunities in India.

This, however, is not a sudden phenomenon.

Ohri adds that India’s realty segment is seeing an increase in foreign interest post-Covid.

According to numbers shared by DLF, NRI sales in their projects have remained above $400 million in the last two financial years.

“Some investors are allocating capital into Indian residential assets not only for investment but also as lifestyle or family assets.

"This is especially with long-term plans for relocation or education of their children,” Agrawal said.