Neel Achary2026 Poised for a Strong Start on Sustained Growth Momentum
After navigating multiple macroeconomic and geopolitical challenges in 2025, 2026 is expected to mark a phase of recalibration and renewed economic momentum. India’s robust GDP growth of 8.2% in Q2 FY2026, achieved despite global uncertainties and shifting trade dynamics, underscores the economy’s resilience. With this growth trajectory, India remains firmly on course to become the world’s third-largest economy by 2030, with an estimated GDP of USD 7.3 trillion.
To reinforce economic development, the government has implemented a balanced mix of fiscal and monetary measures. Fiscal initiatives included the rationalisation of GST rates and revisions in income tax slabs, while on the monetary front, the RBI reduced the repo rate to 5.25% and maintained a neutral policy stance. These measures are expected to stimulate economic activity in 2026, supporting broad-based sectoral growth, improved investor sentiment, and strengthened real estate activity.
GCC-Led Office Demand to Remain Strong
The office market is set to sustain its upward momentum in 2026. According to Vestian Research, gross absorption is projected at 75–80 million sq ft, driven primarily by continued expansion from Global Capability Centers (GCCs). The IT-ITeS and BFSI sectors will remain key contributors, while flex space operators are expected to consolidate further as occupiers prioritise agility and hybrid workplace strategies.
Leasing activity will be led by Bengaluru, Chennai, and Hyderabad, with Mumbai and Pune gaining a larger share. Demand for green-certified, premium Grade-A office assets will intensify as global occupiers advance their ESG and carbon neutrality commitments. Supported by favourable financing conditions and improved availability of labour and materials, construction activity is likely to increase.
Rental values are expected to firm up amid sustained demand and quality supply additions, while vacancy levels across major cities are projected to improve due to stronger absorption and enhanced connectivity to established business districts. Overall, the office segment is poised for another year of fundamentals-driven growth.
Experiential Retail to Shape Sector Growth
The retail sector enters 2026 on a strong footing, building on the momentum of 2025 and supported by stable consumption patterns and continued occupier expansion. The shift toward experiential retail formats, particularly across fashion, F&B, and entertainment, will remain a key demand driver.
Supply constraints through 2025 are expected to result in tighter vacancy levels in early 2026, placing upward pressure on rentals, especially in high-performing high-street locations. Domestic brands will continue to scale their presence, while international retailers are likely to deepen their footprint in Tier-I malls to capitalise on strong footfall and mature retail ecosystems.
Warehousing & Logistics Sector to Accelerate
After a temporary moderation in 2025, the warehousing and logistics sector is poised for renewed acceleration in 2026. Structural support from government initiatives such as PM Gati Shakti, infrastructure development funded through UIDF in Tier-II and Tier-III cities, and GST rationalisation will underpin growth.
A revival in e-commerce activity, which showed early signs of recovery in late 2025, will act as a key demand catalyst. As platforms optimise fulfilment strategies and expand deeper into non-metro markets, leasing activity is expected to rise. Combined with rising consumption and enhanced logistics efficiency, the sector is well positioned for a strong performance.
Housing Sector to Maintain Growth Stability
Following five consecutive years of strong sales, the housing market underwent a rationalisation phase in 2025. However, demand is expected to strengthen in 2026, supported by favourable mortgage rates, rising disposable incomes, and sustained end-user interest.
The premium housing segment will continue to anchor market activity, supported by a steady pipeline of quality launches and increasing interest from affluent buyers. Developers are focusing on experience-led offerings, differentiated design, enhanced amenities, and superior execution standards, reflecting confidence in long-term structural demand and evolving lifestyle preferences.
Collectively, these factors point toward a more mature and balanced housing market, supported by stable policy conditions and improving buyer sentiment.
Investment Activity to Strengthen Further
Investment inflows, which moderated in early 2025 due to global headwinds, recorded a clear recovery in Q2 and Q3, signalling renewed confidence in India’s long-term growth prospects. This momentum is expected to carry forward into 2026.
Commercial assets will remain the preferred choice for institutional investors, supported by strong office demand, expanding GCC operations, and a growing pool of investment-grade assets. The residential segment is also likely to attract increased interest as developers align offerings with evolving buyer expectations.
India is expected to witness a balanced mix of domestic and international capital inflows in 2026, reflecting the growing depth of domestic institutional capital and sustained conviction among global investors.
Commenting on the outlook, Shrinivas Rao, FRICS, CEO, Vestian, said:
“As India enters 2026, the real estate sector is positioned for measured yet sustainable growth across all major segments. Strong fundamentals, expanding premium housing, and adaptive retail and logistics ecosystems will continue to attract both domestic and international capital. This balanced growth approach supports India’s long-term ambition of emerging as the world’s third-largest economy by 2030.”
