India offers highest property yields in Asia Pacific region in Q1: Report
New Delhi, May 21
India offers the highest real estate yields across every major asset class in the Asia Pacific region and recorded an 189 per cent year‑on‑year jump in investment volumes in the Q1 CY 2026, a report said on Thursday.
The report from CBRE said that cap rates in India consistently outpace every other market in the region across office, retail, logistics, hotels, and student housing sectors, in some cases by as much as 320 basis points.
India's Q1 2026 investment volume rose to $2,295.19 million from $839.85 million a year earlier, second to only Singapore that led the region in investment volumes with a 364 per cent year‑on‑year increase.
"We are seeing genuine, broad-based demand across sectors driven by India's economic fundamentals, its growing corporate base, and a young, consumption-led population," said Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE.
"Global investors who have been cautious till now are actively looking to deploy capital here, and we expect this momentum to strengthen further as more institutional-grade products come to market," he added.
The report highlighted sustained interest from domestic institutions, family offices, and global capital markets players as they increasingly allocate to Indian real estate through direct acquisitions, REITs, and structured debt instruments.
India is one of the top markets for real estate debt interest in Asia Pacific, signalling maturing capital markets, the report noted.
The report noted India's Grade A office cap rates range from 7.50 per cent to 8.40 per cent in core central business district locations, compared to 3.25 per cent to 3.80 per cent in Singapore and 2 per cent to 3 per cent in Tokyo.
India is named among the top three preferred markets for Grade A office investment enquiries in Asia Pacific, alongside Singapore and Japan.
Student housing yields in India stood at 8.50 per cent-9 per cent, around 320 basis points higher than the next-highest market, Australia. The institutional-grade logistics cap rates in India stand at 7.15 per cent-7.75 per cent, around 115 basis points more than the second-ranked market, Vietnam with the rates of 6 per cent-7 per cent.
Higher cap rates in India compared to mature markets such as Japan, Singapore, or Korea reflect a still evolving market in institutional participation and price discovery, along with the natural yield premium of a high-growth emerging economy.
— IANS
Reader Comments
This is great for institutional investors but what about middle-class families who can't even afford a 2BHK in most cities? The yields are high because property prices are already sky-high. Let's not paint a rosy picture while ignoring ground realities. 🤔
India's economic fundamentals are indeed strong. With our young population and growing corporate base, it's no surprise global investors are looking at us seriously. But we need to ensure these investments don't lead to real estate bubbles like in some other countries. 🇮🇳
Student housing yields at 8.5-9%? That's impressive! But as a student myself, I only wish the rents were more reasonable. The high yields come from high rents that students like me struggle to pay. Some balance would be nice. 😅
This is a double-edged sword. High yields attract foreign investment, which is good for the economy. But it also means property remains unaffordable for most Indians. The government should use these inflows to boost affordable housing schemes simultaneously.
It's encouraging to see India competing with Singapore and Japan in real estate. Our cap rates are significantly higher, which shows the growth potential. But I hope this leads to better infrastructure and not just more luxury towers. Looking forward to seeing how the REIT market develops. 📈
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.