For global investors weighing where to place long-term capital in Asia, India offers something increasingly hard to find in the region: high rental yields and rising rents in the same market. That combination helped push investment in Indian commercial real estate up 15% year-on-year in the first nine months of 2026, according to a report released on Thursday by property consultancy Savills.
Cross-border investors accounted for a sizeable share of the activity, with inflows into India reaching $5.5 billion during the January–September period.
The numbers explain the appeal. Grade A office assets in India currently generate yields of 7.75% to 8%, while rents are increasing by up to 8% annually. Savills said India remains one of the few markets in Asia-Pacific that offers both relatively high rental yields and income growth.
For an investor, this means the asset pays a strong return today and is also likely to earn more each year as rents rise. Many mature markets in the region offer stability but lower yields, while some high-yield markets have weaker rental growth. India currently offers both.
"India continues to strengthen its position as an attractive destination for global real estate investors," said Anurag Mathur, chief executive of Savills India. He said strong occupier demand, healthy rental growth and competitive yields were supporting investor confidence. He added that growing overseas interest reflected both current returns and long-term growth prospects.
Urbanisation keeps demand growing
The long-term growth Mathur referred to rests largely on urbanisation. The Savills report noted that around 36% of India's population lives in cities, and about 12 million people move into urban areas every year. That steady growth in city populations supports demand for offices, retail space, warehouses and digital infrastructure for years to come.
India's 15% growth also took place as investment rose across the whole region. Commercial real estate investment in Asia-Pacific climbed 27% year-on-year to nearly $200 billion during the same period.
Data centres were the strongest segment regionally, with investment volumes up 79%, followed by retail assets at 36%. Investments in offices, industrial properties and hotels rose by about 22%. The apartment sector was the only segment to decline, falling 12%.
Large institutions are also taking a bigger share of the market. The 25 biggest buyers accounted for 47% of regional deal volumes in the first half of 2026, up from 34% two years earlier. Big institutions tend to favour markets with scale, transparency and dependable income, so their growing share is likely to benefit markets like India.
What it means for India
India grew more slowly than the 27% regional average, but it still grew by double digits and attracted $5.5 billion from abroad. That suggests investors see India as a market for long-term holdings rather than quick trades.
How long the momentum lasts will depend largely on office demand and on whether data centre investment, the fastest-growing segment regionally, expands further in India. With yields of around 8% and rents still rising, India currently compares well with most of Asia-Pacific.
With inputs from IANS
