2025 India Market Outlook

Presenting the 2025 India Market Outlook, our flagship publication providing a comprehensive view of the country’s real estate sector. Leveraging rigorous research and expert insights, this report analyses the current market dynamics at the close of FY2025 and offers a strategic forecast of future trends across segments.

Our key projections for 2025:

·         Economy—India's economic outlook remains positive, demonstrating resilience amidst persistent global economic headwinds. Stabilising inflationary trends have enabled the RBI to reduce the key policy rate in February 2025. Further policy rate adjustments could be anticipated in the subsequent quarters, contingent upon suitable domestic and international economic conditions.

·         Office—We expect continued momentum in office leasing activity in 2025, reinforcing the sector’s strong growth trajectory. While established hubs such as Bengaluru, Hyderabad, Delhi-NCR, and Mumbai remain highly attractive, other key cities are poised to gain further traction due to a combination of strategically located quality supply, readily available talent pool, and occupier strategies focused on diversifying beyond gateway markets.

·         Industrial and Logistics—The surge in demand for premium, modern warehouses, complemented by the influx of investment-grade assets from institutional investor-backed developers, signifies a pronounced trend towards a more mature I&L market. The record leasing activity witnessed in 2024, driven by growing interest from 3PL providers, E&M players, and leading e-commerce companies, suggests a strong outlook for the sector.

·         Retail—India's retail sector is expected to maintain its growth momentum in 2025 as malls continue to refine their tenant mix and offer dynamic shopping, entertainment, and dining experiences. International and domestic brands across various categories are likely to remain key drivers of leasing growth.

·         Residential—Driven by increasing homeownership appetite, rising incomes, and ongoing infrastructure enhancements, the housing market's performance is expected to chart a steady course in 2025. Furthermore, local market dynamics, including inventory availability, developer reputation, investor sentiment, and proximity to infrastructure projects, are likely to remain key determinants of sales performance.

·         Investments—India's real estate investment activity is projected to maintain positive momentum throughout 2025, fuelled by renewed capital inflows into built-up office and warehousing assets and a robust acquisition pipeline for residential development sites. Metropolitan and tier-I cities will likely remain the primary recipients of equity inflows during the year.

Alternate sectors:

·         Data centres—Projections indicate a Y-o-Y increase of ~40% in India’s total DC stock for 2025, potentially reaching ~1,760 MW, driven by a planned supply addition of ~490 MW. This growth is anticipated to be primarily concentrated in Mumbai, Chennai, Delhi-NCR, and Bengaluru.

·         Flexible spaces—Organisations are expected to further embrace hybrid work models, driving sustained demand for flexible workspace solutions that adapt to evolving workforce needs. Demand is expected to expand beyond the technology sector, with growing contributions from BFSI services, E&M, and other industries.

·         Life sciences—India’s life sciences sector is poised for substantial growth in the coming years. This expansion would be fuelled by supportive policy reforms, infrastructural development, increased FDI, enhanced manufacturing capabilities, a readily available and cost-effective skilled talent pool, and a growing emphasis on R&D.

·         Hospitality­—The anticipated resurgence of private consumption expenditure is expected to propel the growth of experience-driven domestic tourism. India’s MICE market is poised for significant expansion, while over 9,000 new hotel rooms are forecasted to be developed in destinations of spiritual significance by 2030.

·         Education—India's expansive education sector benefits from multiple targeted government policies and significant fiscal support. However, to fully actualise the transformative goals of the National Education Policy 2020, a strategic increase in GDP allocation is imperative.

·         Healthcare—Once considered a niche segment, healthcare has emerged as a prominent investment asset class worldwide, driven by evolving epidemiological trends and heightened patient expectations. India's sustained healthcare infrastructure development is expected to catalyse specific trends within various real estate asset classes.

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