Is it time for India’s HNI’s and UHNIs to rethink their real estate portfolios?

Somewhere in India, a wealthy family is proudly flaunting its real estate: an inherited Lutyens' Delhi bungalow, a Goa holiday home, a Mumbai apartment earning modest rent, a land parcel bought decades ago or even a commercial office.

On paper, it is an impressive portfolio. However, when we ask what it actually adds up to, in returns, wealth or lifestyle, the conversation takes a U turn.

Real estate is a significant part of most HNI and UHNI portfolios, but the drawing room chatter around it is often familiar. “My grandfather bought land near Mussoorie. One day, we’ll build villas on it.” Or “Our ancestral home near Pune has gone from a few lakhs to a few crores.” Very few though have calculated what it would take to turn that idle land into a productive asset, factoring in the time, cost and expertise required. Or worked out the actual return on the ancestral home over 30 or 40 years.


While a property rising from a few lakhs to a few crores sounds impressive, without accounting for the holding period, costs and inflation, the headline appreciation tells us very little. The annualised return could be just 6 -7–8% and lower than what an equity portfolio, or a new apartment in an upcoming micro-market, might have delivered.

For generations, families have measured real estate wealth by the number of properties they own, not the returns those assets deliver. That is beginning to change with the next generation asking sharper questions: What does each asset earn? How liquid is it? Is it worth holding?

If you were to rethink your real estate portfolio, what would you keep, sell or redeploy? Here are a few questions to help you get started, before diving in with an expert advisor, for the detailed financial, tax and inheritance implications.

Strategic Portfolio Revamp

What we see most: Assets piled up in one city, one location, or too much of one property type, be it land or newly launched flats, gathered through inheritance, or friendly tips!

Start by giving each property a clear purpose: a home to live in, land with development potential, or an investment expected to deliver strong returns.

Prime addresses such as Lutyens' Delhi, Malabar Hill, Worli, Whitefield or Golf Course Road are unlikely to lose their appeal. Their scarcity and prestige continue to make them exceptional stores of wealth and still the most coveted real estate asset you can own.

For everything else, the hard questions come before the cheque. Whether the property type is legacy, lifestyle or pure investment; how rentable is it; will it beat equity and will the next generation want it, or simply inherit the responsibility? And since real estate is cyclical, we advise families to judge a property trough to trough rather than from a single good or a bad year. A full cycle is a better way to judge what an asset really earned.

Building Cash Flows

Beyond the primary home, residential assets are now benchmarked against other asset classes. Why lock ₹100 crore into an illiquid asset when capital can work harder elsewhere? Commercial real estate has potential to offer much higher rental yield than prime residential, backed by office demand from GCCs, BFSI, flex and IT.

Liquidity matters just as much. A hard real estate can take six months to a year, sometimes longer and families discover this in volatile markets, when they most need capital. The most common drags sometimes can be the so-called hottest buys : The under-construction apartments: two to five years of zero rent and zero use, longer if delivery slips.

Ownership to Exposure

Real estate AIFs remain underused. They work best alongside physical assets, not as a substitute. And a good rule of thumb is to pick the fund manager first, the theme second.

AIFs offer structured real estate opportunities and diversification across cities, sectors and project types, with professional execution.

REITs are another asset class worth diversifying into. They bring ownership of Grade A commercial assets with regular dividend payouts and transparency.

Global Investing to Global Allocation

Overseas property in gateway cities such as London, New York and Miami can diversify a family’s portfolio into dollar assets and offer a hedge against rupee depreciation. But we recommend buying with a clear purpose, such as a child’s education or an overseas business base, rather than for currency diversification alone. With the Liberalised Remittance Scheme setting the funding limits, both the choice of property and the financial planning need careful consideration.

Succession Planning to Governance

Many senior owners tell us they want to simplify because their children may not know where scattered parcels in Tier-II, III and IV towns sit, let alone manage them. The next generation is more globally mobile and less tied to ancestral properties. They value a global lifestyle, quality amenities and like-minded communities over legacy ownership. Succession then becomes the sharpest trigger. Roughly USD 1.3 trillion of wealth is expected to change hands over the next decade, as per a leading I -banking firm’s report.

Without clear succession, multiple heirs can stall a sale. Structuring should be of equal consideration to a portfolio overhaul. Family trusts are gaining ground for this very reason, as they separate ownership from management and set clear rules for transfer. Moving an existing property into a trust, though, can attract stamp duty, so take advice first.

Final Word

The appetite for real estate among family offices is not in question. What has changed is the test: not the number of addresses, but whether each asset is measured for yield, tested for liquidity, diversified and protected through governance. Revisit the strategy every few years, then follow it.