In this interaction with ETMarkets’ Kshitij Anand, BK Malagi, Vice Chairman of Experion Developers, shares his views on how investors planning to deploy ₹1-2 crore can find the right balance between residential and commercial real estate, highlighting the importance of location, asset quality and long-term fundamentals in the year ahead. Edited excerpts –
Q) Thank you for taking your time. The BSE Realty index may have underperformed the Nifty 50 in 2025, but real estate as a category and as an asset class has done well. Please help us with an overview.
A) If you looked only at the stock indexes, you would miss what actually happened in 2025: housing demand remained robust in most major markets, especially in the premium and upper mid-range segments, driven by buyers with real needs rather than speculation.
Commercial leasing also surprised positively, something that usually only happens when companies have confidence in hiring and expansion.
Real estate moved at a very different pace than equities, and last year clearly showed that the fundamentals remain intact.
Q) Branded homes are probably the biggest theme to dominate luxury in 2025. What do you think are the big trends you see that could emerge in 2026?
A) From 2026, consumers will consider the quality of life more important than its size. Buyers will look closely at how a project improves everyday life, valuing strong connectivity and infrastructure, even in peripheral locations above busy city centres.Thoughtful design will become more important: efficient layouts, balanced density, privacy and well-being-oriented amenities such as green spaces and a healthy indoor climate will become essential.
Sustainability is no longer optional; energy efficiency, resource management and environmentally responsible construction are now basic expectations. At the same time, technology is evolving from novelty to necessity.
Smart systems are pragmatically integrated to improve comfort, safety and operational efficiency. In this landscape, projects that deliver long-term holistic livability, not just facilities at scale or surface level, will be successful.
Q) Will 2026 be a stronger year for institutional and foreign capital inflows into real estate? What will investors focus more on?
A) Yes, we expect 2026 to see better traction in institutional participation. Investors are spending more time understanding asset quality, tenant profile and exit visibility. Class A offices would remain high on their radar, especially offices that match GCC demand and long leases. Data centers are emerging as a serious asset class. The emphasis would be on stability, compliance and predictable income.
Q) What is the role of REITs or fractional ownership in 2026, both in new listings and in private investor participation?
A) REITs and fractional ownership are slowly becoming part of mainstream investment conversations. The SM REIT framework is especially important because it brings smaller but high-performing assets into a regulated structure.
For private investors, this changes the perception of commercial real estate from inaccessible to investable. That said, adoption will be gradual. Investors still need education about risks, return cycles and liquidity expectations.
Over time, these platforms will enable broader participation, but their real success will be in the quality of the underlying assets and consistent performance, over and above the impact of just lower ticket sizes.
Q) Office leasing will increase significantly by 2025, driven in part by global capacity centers. What are the factors that are bringing these occupiers into the Indian markets today?
A) GCCs are no longer there just to save costs. Many of them handle core functions such as product development, analytics and AI-driven research.
India has a strength of talent that cannot be duplicated in most markets, and now companies feel confident about expanding their operations here.
The quality of infrastructure has improved significantly, especially in the typical technology hubs.
Customer expectations for world-class facilities in terms of design, environment and safety are easily met in our country. The ecosystem today supports both expansion and innovation.
Q) What are the big trends you see in NCR?
A) There is a clear infrastructure-driven shift at NCR. New highways, metro lines and air links, such as Jewar airport, are pushing the boundaries on where people will live and work. Demand for upper-end housing continues and remains strong.
Commercial activity is also seeping beyond traditional hubs, with improved connectivity at the heart of this trend.
The second obvious trend is the steady growth of logistics and warehousing. Although often invisible, it is a very important part of regional economic activity. NCR’s growth seems much more structured and systemic these days.
Q) Will Tier-II and Tier-III cities emerge as serious contenders for both residential and commercial activities in 2025? What is driving this shift?
A) Yes, and this phenomenon has been happening for several years. Infrastructural connectivity in terms of better highways, airports and internet connectivity has helped bridge the gap between the bigger cities and the smaller ones.
This market offers better space and purchasing power for the people who live there. For the companies, this translates into access to talent and infrastructure potential without the associated costs and congestion. Companies also notice that retaining talent is better done there.
Q) How do you see rental yield trends in the new year?
A) For 2026, returns are likely to be on the rise, with a selective improvement in high-quality commercial assets. Office buildings with strong tenants and modern specifications will continue their performance.
As housing availability increases, rental properties will increase modestly. However, well-located and well-managed properties that provide amenities that ensure physical and mental well-being will perform better.
Q) If one plans to invest Rs 1-2 cr in the year 2026, where should the ideal residential or commercial asset be, in which region, and why?
A) For this investment range, balance will be key. On the commercial side, fractional ownership or SM REIT exposure to Class A offices will provide stable income without increasing management complexity.
In terms of residential investment, a premium home within an adequately connected NCR micromarket makes a lot of sense, especially in areas where infrastructure is catching up quickly.
The credibility of the developer and long-term viability are the key words here. Real estate is best rewarded with patience, and the fundamentals of the location remain paramount.
Q) Your most important findings of the year 2025?
A) The most important conclusion from 2025 is that the Indian real estate sector has indeed become much more disciplined. Demand is increasingly driven by end users and smart investors.
Growth opportunities will also remain strong and sustainable in the commercial segment. The industry seems more developed and synchronized with economic growth compared to a few years ago.
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(Disclaimer: Recommendations, suggestions, views and opinions expressed by experts are their own. These do not represent the views of the Economic Times)
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