REITs and fractional ownership to expand retail access to real estate in 2026, says Praveen Sharma

After a year dominated by premium housing and institutional activity, 2026 is shaping up to be a turning point for retail participation in Indian real estate. As investors look beyond traditional home ownership, demand is rising for structures that offer income visibility, professional management, and liquidity—without the high entry barriers of direct property investments.Speaking to Kshitij Anand of ETMarkets, Praveen Sharma, CEO of REA India (Housing.com), explains how REITs and regulated fractional ownership platforms are set to play a much bigger role in democratising access to institutional-grade real estate.He discusses why yield-focused assets, improved transparency, and maturing regulations are drawing retail investors closer to commercial real estate, while reshaping how Indians participate in the property market in 2026 and beyond. Edited Excerpts –Q1. Luxury and branded residences dominated 2025. What big trends do you see emerging in 2026?A) 2026 will be about broadening demand beyond just luxury. While premium and branded residences will remain strong, we are already seeing growing traction for larger-format mid-segment homes, particularly 3BHKs, driven by hybrid work and evolving lifestyle needs.Price stabilisation across several markets is also encouraging serious end-users who were priced out earlier to return.At the same time, digital engagement is deepening, with buyers increasingly demanding transparency, and data-backed decision-making.Q) Will 2026 be a stronger year for institutional and foreign capital inflows into real estate? What will investors prioritise?A) The outlook for institutional and foreign capital inflows into Indian real estate remains positive for 2026. Investors are increasingly viewing the sector as a mature, income-generating asset class.Capital is likely to be directed toward Grade A office assets, logistics, data centres, and rent-yielding residential developments, particularly in markets with strong job creation and regulatory clarity such as NCR, Bengaluru, and Hyderabad.Yield visibility and long-term stability will be key considerations.Q) What role will REITs and fractional ownership play in 2026—for both listings and retail participation?A) REITs and fractional ownership will play a significantly larger role in widening retail participation in real estate.As awareness grows, investors are seeking stable yields, professional asset management, and liquidity, which REITs offer.We also expect more structured and regulated fractional ownership platforms to gain traction, particularly in commercial real estate, allowing retail investors access to institutional-grade assets.Q) Office leasing surged in 2025, driven by GCCs. What’s attracting these occupiers to India now?A) India has evolved from being a cost-efficient back office to a global capability and innovation hub.GCCs are attracted by India’s deep talent pool, scalable Grade A office infrastructure, and improving urban ecosystems.Cities such as Bengaluru, Hyderabad, Pune, and NCR offer a compelling combination of talent availability, cost efficiency, and long-term growth visibility, encouraging larger and longer leasing commitments.Q) What are the big real estate trends you’re seeing in NCR?A) NCR has clearly emerged as India’s strongest-performing housing market. Demand remains robust across both 2BHK and 3BHK configurations, particularly in Noida, Greater Noida, and Gurugram.This momentum is being driven by infrastructure upgrades, strong job creation, and sustained investor confidence. Premiumisation is a key trend, although affordability pressures in certain micro-markets warrant attention.Q) Are Tier-II and Tier-III cities emerging as serious contenders in 2025–26? What’s driving the shift?A) Yes, Tier-II and Tier-III cities are increasingly emerging as structural growth markets, not just cyclical opportunities. Improved infrastructure, decentralisation of employment, rising aspirations, and better quality of life are driving residential and commercial demand.Developers are responding with more organised supply, particularly in the affordable and mid-income segments.Q) How do you see rental yield trends shaping up in 2026?A) Rental yields are expected to remain stable to marginally improve in 2026, particularly in employment-led markets. With affordability challenges persisting in several metros, renting continues to be the preferred option for many households. Cities with strong job inflows such as Bengaluru, Hyderabad, and NCR are likely to see the healthiest rental demand and yield stability.Q) What were your key learnings from 2025?A) 2025 reinforced that Indian real estate is entering a more mature, disciplined, and end-user-driven phase. While premium housing remained resilient, affordability emerged as a key challenge requiring policy support.The year also underlined the growing role of technology in driving transparency, trust, and informed decision-making, laying the foundation for sustainable long-term growth.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)