India stands out with its ability to deliver stability, large-scale real estate growth, says Gustavo Favaron

Time of India

5 days ago

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What is the current sentiment of global investors towards Indian real estate?
What type of global funds are eyeing India, and what asset classes interest them most?
What is holding back global investors from deploying large capital into India?
How do global funds view India versus other emerging markets like Brazil or Mexico?
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Is the Indian real estate market at risk of correction, especially in residential?
Is there a growing trend of NRI and diaspora capital returning to India?
What real estate segments are expected to lead growth in 2025?
What is the biggest obstacle to real estate growth today?
India is rapidly becoming a core global investment destination, bolstered by the growing maturity of its real estate developers and the increasing appetite from institutional capital. In a volatile global environment, the country stands out with its ability to deliver large-scale real estate developments and a stable growth outlook. In conversation with Sobia Khan of The Economic Times, Gustavo Favaron , CEO & Managing Partner of GRI Club and Co-founder of 8 Capital , talks about why India is attracting strategic attention, what is still holding back significant capital inflows, and how asset classes like commercial, residential, and warehousing are shaping up. He also discusses the growing influence of Non-Resident Indians (NRIs) in the country's real estate landscape.Global capital flows are influenced by geopolitical and economic uncertainty—wars, inflation, high interest rates, and general instability in traditional markets like the US, UK, and Europe. Amid this chaos, India is seen as a relatively stable and fast-growing alternative. The macro indicators—demographics, policy stability, and economic momentum—are compelling. While established players like Blackstone, GIC, Brookfield, and CPPIB are already active, we are not seeing a high volume of new entrants yet. Many funds are in 'study mode', waiting for clarity globally before making moves. But I firmly believe India is the next big destination for real estate capital.We are seeing interest from private equity, pension funds, and sovereign wealth funds—particularly those with a five- to ten-year investment horizon. They like India because of the scale and relative geopolitical neutrality. On asset classes, commercial real estate remains top preference, especially office space and increasingly warehousing. However, residential is emerging too—Blackstone's recent move into residential is a signal. As developers get more mature and organized, international capital will flow more comfortably into residential.Bangalore, Mumbai, and Delhi NCR top the investment charts, driven by strong demand, infrastructure upgrades, and maturing commercial ecosystems. Hyderabad and Pune also rank high, reflecting their emergence as IT and manufacturing hubs. Investors are also eyeing Tier-2 cities like Ahmedabad and Indore, anticipating decentralization and urban sprawl to create the next wave of investable real estate.First, mature markets still offer distressed opportunities—why would someone travel to Mumbai when they can buy undervalued assets in London? Second, the pace of decision-making— domestic funds in India move faster and adapt quicker. International funds often lose deals due to longer internal processes. Finally, global investors are adjusting to operating in high-interest, inflation-driven environments—something Indian players are already used to. But once these pockets of distressed supply in developed markets dry up, more capital will head India's way. The opportunity is just beginning.India currently stands out and is seen as more stable and predictable. The country isn't entangled in international conflicts, and the demographics are unmatched. China is shrinking, so is Europe, and the US is also slowing. India remains one of the few large markets with real growth potential. That makes it very attractive to long-term, patient capital.I do not think we are in bubble territory. Yes, residential prices—especially in the high-end segment—have grown sharply, but it was more of an adjustment than a spike. Deep-pocketed buyers still exist, and they will invest in the assets. The market will stabilize, but we are far from saturation. India's overall real estate market is maturing. The quality is better, developers are more professional, and compared to other countries, approvals and bureaucracy are equally complex—so India isn't an outlier. You need to zoom out and look at the cycle holistically and right now, the trajectory is upward.Absolutely. NRIs are increasingly investing back in India—either through REITs or direct real estate. Many Indians living abroad are uncertain about the future in places like the UK or US and see opportunity and growth here in India. This is not a short-term trend—it is accelerating. From the outside, India's rise is often more visible than from within. The momentum is real, and NRIs want to be part of it.Office space remains the most sought-after asset class, followed by residential and plotted developments. This trend aligns with the post-pandemic shift toward high-quality, tech-integrated office ecosystems and a growing urban middle class seeking residential ownership. Global investors are increasingly interested in Indian assets with stable, scalable returns, especially in Grade-A office and housing portfolios. Data centers and warehouses also show emerging strength, reflecting India's digital and e-commerce surge. These preferences suggest a recalibration towards long-term, income-generating assets in Tier-1 cities.The top concern for developers is regulatory inefficiency—delays in approval processes as the most pressing challenge, followed by rising construction costs and limited access to financing . Yet, developers and investors alike are adapting by focusing on compliance, pre-leased assets, and risk-sharing models. Addressing regulatory bottlenecks could unlock significant capital inflows and fast-track India's real estate maturation.