FreepikNew Strategies for Indian Residential, Warehousing, Retail, and Hospitality
Revealing how acquisitions, exit strategies, and new operational models are redefining India’s core real estate asset classes
October 21, 2025Real Estate
Written by Jorge Aguinaga
Key Takeaways:
From the core residential market to the rapidly expanding warehousing, retail, and hospitality sectors, India's physical real estate landscape is undergoing a strategic transformation. This evolution is defined by new playbooks for these foundational assets, revealing a market that is fundamentally evolving, moving beyond traditional development to embrace sophisticated cost controls, mature exit strategies, and new experiential models.
Strategy and returns in this sector boil down to a few key ingredients. Land acquisition is identified as one of the single most critical factors in getting the returns right. Beyond the initial cost of acquisition, the focus is on rigorous cost controls through the entire process.
Furthermore, developers who control their full channel - overseeing everything from acquisition and construction to the final consumer experience - are best positioned to manage costs effectively. The value of building a brand and its direct impact on profitability is also a key factor.
Alongside this demand, the sector is seeing a significant maturation in two key areas: ESG and exit strategies. ESG norms are now well accepted and integrated into standard specifications, with features such as solar power and EV charging becoming common. These are no longer seen as costs but as investments that provide a better ROI or at least future-proof the asset.
Funding is readily available from a wide range of sources, including institutions, AIFs (Alternative Investment Funds), REITs (Real Estate Investment Trusts), family offices, and a notable increase in "great interest" from Indian capital. This capital now has a clear path to liquidity, as the market has developed four distinct exit routes:
In response, the hospitality industry is increasingly adopting an "asset-light" model , where operators focus on services while developers handle the physical properties.
At the same time, the concept of "hospitality everywhere" is taking hold. The industry's influence is expanding well beyond traditional hotels and into airports, corporate offices, retail spaces, and flex spaces.
The high standard of new developments, exemplified by Terminal 2 of the Bangalore International Airport, is setting a new benchmark - even by retail mall standards.
New asset classes such as "airport cities" are emerging as major destinations in their own right. The Bangalore Airport City, for instance, plans to expand its hotel key count from 370 to over 5,200 to meet projected demand.
This growth is supported by new demand drivers, including a consumer desire for "experiential hospitality" and the rise of "religious tourism" as a major travel segment.
These strategic insights were shared during the closing session of the India GRI 2025 summit in Mumbai, which featured summaries and reflections from leading industry experts who had moderated discussions throughout the day. The panel providing these takeaways included Anuj Kapoor, Founder & MD of Upwisery; Balbirsingh Khalsa, Executive Director - Industrial & Capital Markets at Knight Frank India; Aseem Kohli, Director at Varde; Sandeep Kotak, MD & CEO of Mango Advisors; and Rao Munukutla, CEO & Executive Director at BACL, India.
Key Takeaways:
- The residential sector remains the "fundamental core" of Indian real estate, with land acquisition identified as one of the most critical factors for getting returns right.
- The warehousing sector has matured, showing robust demand for Grade-A assets and clear, developed exit strategies for investors, including private sales, REITs, and IPOs.
- The hospitality industry is expanding beyond hotels in a trend described as "hospitality everywhere", adopting "asset-light" models and integrating into new areas like airports and offices.
From the core residential market to the rapidly expanding warehousing, retail, and hospitality sectors, India's physical real estate landscape is undergoing a strategic transformation. This evolution is defined by new playbooks for these foundational assets, revealing a market that is fundamentally evolving, moving beyond traditional development to embrace sophisticated cost controls, mature exit strategies, and new experiential models.
Residential
While high-growth emerging asset classes capture headlines, the residential sector remains the “fundamental core” of Indian real estate. The urban residential market, valued at approximately INR 6.5 lakh crore, is growing at a stable long-term rate of 10-14%. To put its scale in perspective, alternative strategies such as co-living and senior living combined constitute only 1% of the market.Strategy and returns in this sector boil down to a few key ingredients. Land acquisition is identified as one of the single most critical factors in getting the returns right. Beyond the initial cost of acquisition, the focus is on rigorous cost controls through the entire process.
Furthermore, developers who control their full channel - overseeing everything from acquisition and construction to the final consumer experience - are best positioned to manage costs effectively. The value of building a brand and its direct impact on profitability is also a key factor.
Warehousing
The warehousing and logistics sector is experiencing very strong and growing demand, particularly for high-quality, Grade-A or even A++ assets. This is quantified by a robust absorption rate of 50 to 60 million square feet annually across India's top 15 cities.Alongside this demand, the sector is seeing a significant maturation in two key areas: ESG and exit strategies. ESG norms are now well accepted and integrated into standard specifications, with features such as solar power and EV charging becoming common. These are no longer seen as costs but as investments that provide a better ROI or at least future-proof the asset.
Funding is readily available from a wide range of sources, including institutions, AIFs (Alternative Investment Funds), REITs (Real Estate Investment Trusts), family offices, and a notable increase in "great interest" from Indian capital. This capital now has a clear path to liquidity, as the market has developed four distinct exit routes:
- Private Sales: Considered the best route for portfolios between 1 million and 10 million square feet.
- REITs (Real Estate Investment Trusts): These vehicles, along with InvITs, play a very good role for larger portfolios, typically in the 10-20 million square feet range.
- InvITs (Infrastructure Investment Trusts): Functionally similar to REITs, these are also a key exit for 10-20 million square feet portfolios.
- IPOs: A viable route for very large-scale operations (more than 30 million square feet) that have large land banks. However, this path requires strong governance, patient investors, and is more costly and highly dependent on the timing of the stock market.
During India GRI 2025, experts noted that the warehousing sector has matured, with clear exit strategies such as REITs, InvITs, and IPOs now well-established for investors. (GRI Institute)
Hospitality & Retail
The hospitality and retail sectors are being reshaped by rapid urbanisation and new consumer demands. By 2050, over 50% of India's population will live in urban areas, and this concentration in cities is driving significant growth.In response, the hospitality industry is increasingly adopting an "asset-light" model , where operators focus on services while developers handle the physical properties.
At the same time, the concept of "hospitality everywhere" is taking hold. The industry's influence is expanding well beyond traditional hotels and into airports, corporate offices, retail spaces, and flex spaces.
The high standard of new developments, exemplified by Terminal 2 of the Bangalore International Airport, is setting a new benchmark - even by retail mall standards.
New asset classes such as "airport cities" are emerging as major destinations in their own right. The Bangalore Airport City, for instance, plans to expand its hotel key count from 370 to over 5,200 to meet projected demand.
This growth is supported by new demand drivers, including a consumer desire for "experiential hospitality" and the rise of "religious tourism" as a major travel segment.
Looking ahead
From the foundational importance of land acquisition in residential to the mature, multi-channel exit strategies in warehousing and the asset-light, "hospitality everywhere" model, it's clear that India's core property assets are undergoing a sophisticated transformation. The focus has sharpened on operational excellence, ESG integration, and adapting to new consumer demands to drive future growth.These strategic insights were shared during the closing session of the India GRI 2025 summit in Mumbai, which featured summaries and reflections from leading industry experts who had moderated discussions throughout the day. The panel providing these takeaways included Anuj Kapoor, Founder & MD of Upwisery; Balbirsingh Khalsa, Executive Director - Industrial & Capital Markets at Knight Frank India; Aseem Kohli, Director at Varde; Sandeep Kotak, MD & CEO of Mango Advisors; and Rao Munukutla, CEO & Executive Director at BACL, India.