While Budget 2026 does not introduce any real estate–specific incentives, its sustained focus on development of planned growth clusters in tier-II and tier-III cities, including temple towns, is expected to unlock new opportunities across residential, industrial, logistics and mixed-use real estate in both established and emerging markets, say real estate experts.
The emphasis on infrastructure, urban development and manufacturing in tier-II and tier-III cities, alongside investments in transport, logistics and Urban Economic Regions (CERs), is likely to reshape urbanisation patterns and support residential, commercial and logistics demand over the medium term, they say.
1. City Economic Regions: In a major push to urban growth, the government has proposed setting up seven City Economic Regions (CERs), including in Bengaluru, Surat and Varanasi, with an allocation of ₹5,000 crore per region over five years. Experts say this initiative is expected to spur growth across housing, industrial and warehousing, data centres, retail, hospitality and office markets.
2. Manufacturing: The government’s push to scale up manufacturing across sectors such as biopharma, electronics, semiconductors, chemicals, rare earths and textiles is expected to drive sustained demand for Grade A industrial and warehousing space, according to Colliers India.
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Key proposals include mega textile parks, three plug-and-play chemical parks, a ₹40,000 crore outlay for electronics component manufacturing, revival of 200 legacy industrial clusters, and a ₹10,000 crore container manufacturing scheme. Initiatives such as Semiconductor Mission 2.0, the Electronics Component Manufacturing Scheme and the proposed Rare Earth Corridor are also expected to boost the EV ecosystem and drive long-term demand for industrial and logistics real estate, Colliers India said.
3. Pharma sector: The Biopharma SHAKTI scheme, with an outlay of ₹10,000 crore over five years, along with the proposal to establish three new National Institutes of Pharmaceutical Education and Research (NIPERs), is expected to boost manufacturing capacity and innovation in India’s biopharma sector, while driving demand for specialised office and R&D spaces in key life sciences hubs across the country, it noted.
4. Data Centres: Foreign companies offering cloud services globally will be eligible for a tax holiday until 2047, provided data centre services are based in India. This is expected to accelerate demand for power-ready industrial land, specialised facilities, and data centre assets, strengthening a high-growth real estate segment, as per an analysis by Knight Frank India.
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5.Education infrastructure development: Budget 2026 proposes the establishment of a new National Institute of Design, five university townships near industrial and logistics corridors, and three new All India Institutes of Ayurveda, along with one dedicated hostel for women in every district in STEM institutions.
It also includes plans to set up or upgrade astrophysics infrastructure facilities. Collectively, these measures are expected to stimulate planned urban development and institution-led townships, driving long-term real estate growth in emerging education and innovation hubs, as per an analysis by Colliers India.
Knight Frank India said that this is expected to support development of student housing and ancillary real estate in education-led clusters.
6 Tourism: Budget 2026 proposes the creation of five tourism destinations across the five Purvodaya states in the North-East, along with the development of 15 archaeological sites, including Lothal, Dholavira, Rakhigarhi, Adichanallur, Sarnath, Hastinapur and Leh Palace. It also outlines a scheme to establish five regional medical tourism hubs through public–private partnerships, integrating AYUSH, diagnostics, medical tourism facilitation, and post-care infrastructure.
Together, these initiatives aim to promote India as a hub for medical tourism while strengthening urban infrastructure and unlocking tourism-led development, supporting real estate growth across hospitality, retail and second-home segments, the analysis by Colliers showed.
The focus on destination development, tourism infrastructure, and connectivity, including the setting up of a National Institute of Hospitality, upskilling of tourism guides, and creation of a National Destination Digital Knowledge Grid, are all positives for hospitality, resort, second home, and mixed-use real estate, while also supporting urban regeneration in heritage and coastal cities, said Knight Frank India.
7. Introduction of High Speed Rail programme: Identified corridors include Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri. High-speed rail is expected to enhance regional integration, expand effective commuting zones, and improve long-term real estate prospects around stations and peripheral urban nodes, as per an analysis by Knight Frank India.
8. Dedicated Freight Corridors and National Waterways: New Dedicated Freight Corridors proposed in Budget 2026 connecting Dankuni in the East to Surat in the West. In addition, 20 new National Waterways are to be operationalised over the next five years, starting with National Waterway 5 in Odisha. These initiatives will improve the logistics ecosystem in Eastern and Central India and support industrial and warehousing real estate development, said Knight Frank India.
9. Recycling of Central Public Sector Enterprise real estate assets through REITs: The proposal to monetise underutilised CPSE land and buildings through dedicated REIT structures is expected to enable conversion of dormant assets into investable capital and could increase the supply of institutional-grade real estate over time.
10. Establishment of Infrastructure Risk Guarantee Fund: A partial credit guarantee mechanism has been proposed to support lenders financing private infrastructure developers. Improved access to financing is expected to support infrastructure execution and indirectly benefit real estate development linked to major projects, said Knight Frank India.