THE RISE OF FAMILY OFFICES, A NEW FORCE SHAPING INDIAN REAL ESTATE

Traditionally, India’s wealthy often made f inancial decisions within the family or through trusted advisors, with the primary focus on wealth preservation mainly through asset classes like fixed deposits, real estate, and gold. After the economic liberalization in 1991, when rapid economic growth led to substantial wealth accumulation, business families began to recognise the need for a professional approach to capital management. This led to the rise of dedicated family offices, either as single-family offices (SFOs) or multi-family offices (MFOs). Over the past two decades, the evolution of family offices in India has been quite remarkable. At present, the new avatar of family offices comprises dedicated teams of investment advisors, tax experts, and legal professionals managing the family’s wealth in a strategic manner. The role of the family office too has expanded from investment management to globalization and succession planning.



Elaborating on the rise of family offices in India Chaitanya Seth, Partner & Consulting Leader - Real Estate, EY Parthenon shared, “Family offices have significantly risen from ~50 to 300+ in last 5 years and they are no longer passive wealth preservers. With significant growth rate in UHNI in India, we definitely expect this segment to grow. They are active investors, often led by second- or third-generation entrepreneurs with their investments across Capital markets, real estate, Startups, AIF and Gold etc.”


THE NOTICEABLE SHIFTS

In terms of the evolving investment strategies, from historical inclination towards predictable asset classes, the wealthy are actively investing in alternative investment funds (AIFs), private equity, venture capital, and early stage start-ups. There is a notable move towards international diversification, driven by rupee depreciation and geopolitical considerations. Among the younger generation, impact investing and ESG-compliant portfolios are gaining traction, as they believe in prioritising sustainability alongside returns. There has also been a significant de parture from male-dominated succession model to more inclusive decision-making, with daughters, spouses, and professional managers increasingly involved in wealth management. Today, family offices are going beyond the primary focus on wealth preservation and succession planning, and are actively pursuing strategic diversification, business continuity across generations and philanthropic initiatives.


FAMILY OFFICES REDEFINING REAL ESTATE INVESTMENT STRATEGIES
A great transformation is taking place in how Indians are managing and protecting as well as growing their capital. This is reflected in the number of family offices increasing from 45 to around 300 between 2018 and 2024, as per a study by EY India and Julius Baer. Wealth preservation remains a primary goal for family offices, but wealth creation especially through real estate investments, is also of high priority.

Sumesh Mishra, Founder, Lighthouse Luxury shared his thoughts, “Family offices in India are now managing over $30 billion (AUM) and are moving from passive land ownership to strategic, institutional-style real-estate investments. They prioritise high quality, income-generating assets such as commercial, mixed-use, rental housing, and logistics projects over speculative land or residential builds. Most of their investments will be primarily focussed in Tier 1 or Tier 2 cities and / or along the new growth corridors where they can see urban development be the quickest and planned more efficiently.

As per Amit Goenka, CMD at Nisus Finance, “Unlike institutional funds driven by quarterly cycles, family offices prioritize intergenerational wealth preservation, stable cash flows, and strategic diversification. This has created a preference for structured investments — pre-leased commercial assets, income-yielding logistics parks, and co-living or senior-living platforms — which blend predictable yields with long-term appreciation.”

Sharad Mittal, Founder &CEO, Arnya Real Estates Fund Advisors added, “Family offices in India are transforming their real estate investment strategies by adopting a more institutional approach, moving away from traditional methods. They are increasingly embracing structured investment vehicles such as Alternative Investment Funds (AIFs), which enable access to institutional-grade assets that are typically beyond the reach of a single-family office. These professionally managed funds provide exposure to high-quality real estate portfolios at a fraction of the cost, eliminating the operational challenges associated with directly owning and managing physical properties.”

In addition, the recent changes have made AIFs attractive for investors, prompted by the fact that Category I and Category II AIFs focus their investments on infrastructure and similar sectors. And family offices too are expanding their focus beyond traditional assets, increasing investments in alternative investment funds (AIF).


BALANCING WEALTH PRESERVATION & REAL ESTATE RETURNS

Balancing long-term wealth preservation with legacy goals and the pursuit of attractive returns requires a carefully crafted strategy that aligns with the family’s unique values and objectives. According to Mittal, “It starts with diversification across asset classes, sectors, and geographies to reduce risk and enhance portfolio resilience. Equally important is establishing strong governance and succession planning frameworks that ensure smooth intergenerational transfer of wealth while fostering transparency and alignment among family members. Liquidity planning and tax optimization are key to avoiding forced asset sales and maximizing after-tax returns, helping safeguard capital during volatile phases.

Integrating philanthropic and impact investing initiatives can also support legacy-building and family unity. Ultimately, partnering with experienced investment managers who provide disciplined risk management and tailored asset allocation enables family offices to achieve sustainable, risk-adjusted returns that honour both wealth preservation and growth ambitions.” At Arnya’s, our approach aims to create a full-stack independent real estate investment management company that serves as a one stop solution for all financial real estate investments. Over the next couple of years, our focus is to offer structured investment strategies across residential, rental assets, and real estate equity segments. In our debt fund, we concentrate on Tier-1 developers in India’s top eight cities, providing early-stage growth capital for residential projects with disciplined risk management and active asset oversight. Our approach


emphasizes high-yield, fixed-tenure debt investments supported by strong security structures. In our newly launched equity fund, we have partnered with Supreme Universal, a major developer based in Mumbai, to target the Mumbai redevelopment market and greenfield projects in Pune. This strategy allows us to deliver comprehensive, risk-mitigated investment opportunities aligned with the needs of discerning investors,” he informed. Mishra shared “We would advise clients to invest in stable, income generating assets such as Grade-A commercial building, leased offices, and REITs for steady cash flow and capital safety.

Allocate a smaller share to higher-yield projects such as redevelopment, co-living, logistics parks, or Tier-II/III city developments for long-term appreciation. Balance exposure across residential, commercial, and alternative assets, and across mature metros and emerging urban corridors to spread risk and capture growth. Lighthouse’s unique approach to structure investments. “We are a data driven and analysis driven organisation. We intend to be a full stack real estate service provider to the family offices across all real estate segments viz Residential, commercial, preleased, second home, international and REITs. We provide solutions on the basis of cash flow requirement, capital appreciation, risk taking abilities of families and other such other parameters,” he added.

Seth added, “We witness 15 20% investments going in real estate asset class. The key themes or driver are income generating, sustainability focussed, transparency, long term value creation and creating legacy landmarks. Family offices prefer direct investments or co investments with trusted developers and institutional partners. This allows them to retain control over asset selection and governance and align investments with family values and long-term goals. Also, unlike institutional investors, family offices can invest across the capital stack—equity, mezzanine, or debt, which provides developers more structuring options.


The Knight Frank Wealth Report 2025 found that 44% of family offices plan to increase their real estate investments, demonstrating UHNIs confidence in the realty market’s long-term prospects.


NEXT-GENERATION & THEIR INVESTMENT PRIORITIES

Today’s younger generation is changing the way family offices approach investing, moving away from a single decision-maker model to a more collaborative, data-driven process. Not surprisingly, the family offices catering to first-generation entrepreneurs or next-gen investors, are more risk-tolerant and eager to invest in innovative business models. Mittal observed, “There’s a noticeable shift toward structured investment decisions, with next-gen family members prioritizing professional management, comprehensive analysis, and clear diversification—especially in real estate, where spreading investments across geographies now plays a key role in reducing risk.

Sustainability and social impact are gradually becoming an investment criterion, reflecting a desire to create positive change alongside f inancial returns. Overall, these trends show a confident embrace of collective decision-making and experienced external managers to optimize outcomes and align investments with evolving family values and global opportunities.” Mishra added, “The next-gen priorities blend wealth creation with purpose and sustainability, reshaping family real-estate strategies for the long term.

At Lighthouse we try and address their end goals and expectations and suggest strategies which are aligned to the same. Second- and third-generation family members are moving from traditional landholding to professional, diversified, and impact driven real estate investments. They prioritise income-generating, sustainable, and tech-enabled assets (like logistics, co-living, and green buildings), emphasise governance and ESG, and use data-driven, global approaches. In our real estate domain and expertise, we understand their perspective and accordingly offer opportunities which can give them the best blend and help them in achieving their investment objectives.”

Sheth expressed, “Newer generations are less keen on holding physical real estate and keener on f inancial assets. Typically, this is because of the complexity involved in physical real estate, regular upkeep etc. By moving to financial assets, this risk is reduced. However, there will always be a section that loves their CRE and the rental yields but this mix is changing.”


Today family offices, going beyond the primary focus on wealth preservation & succession planning, are actively pursuing strategic diversification, business continuity across generations and philanthropic initiatives.


EMERGING ASSET CLASSES FOR FAMILY OFFICES

“At Nisus Finance, we are witnessing family offices shift from passive limited partnerships to active co developers or anchor investors in curated projects. Governance, transparency, and bespoke structuring—often through AIFs or SM-REITs—are now central to their participation. The next generation is further steering these entities toward data-driven decisions, ESG compliant assets, and technology enabled platforms that offer liquidity and insight,” shared Goenka. Mittal added, “Residential real estate remains a core asset class from a housing perspective, but particularly in India, where rental yields are relatively low—averaging around 3% to 4% depending on the city and property type—it becomes challenging to generate meaningful returns beyond a certain point. Additionally, given real estate is inherently cyclical, correctly predicting market cycles is crucial for success.

Co-living models are an extension of residential, aiming to maximize rental income by housing unrelated individuals together; while interest in this sector is growing, the potential for outsized returns remains uncertain. Commercial real estate offers higher rental yields, notably for Grade A assets, but demands significant capital investment and involves complexities like vacancy management and operational challenges. Consequently, alternative real estate assets are poised to form a larger portion of family offices’ portfolios going forward. These alternatives provide diversification across multiple high-quality assets, managed by experienced investment managers, enabling family offices to achieve superior risk-adjusted returns in a complex and evolving market.

As per Mishra, beyond traditional residential and commercial real estate, new real estate sectors - like co-living, senior living, data centers, or logistics provide diversification benefits. “Many of these sectors offer stable cash flows (like logistics, data centres) plus growth potential (co-living, senior). Family offices are often more willing to hold assets for 10-20 years, aligning well with sectors like senior living and data centres. Because many of these segments are still emerging in India, early movers (including family offices) may capture ‘first mover’ advantages. For family offices, logistics/industrial real estate offers: scalability, predictable cash flows (leases to strong tenants), often lower management intensity compared with residential, diversification from purely office/ residential risk.”

Seth stated, “We see large family offices investing in residential and commercial asset classes, however with increased focus on digital infrastructure, explosion on quick commerce, evolving demographics and increasing urbanization we see increased interest and investment in Data centres, logistics parks and warehouses, senior living and co living and mixed-use developments. Some family offices also engage in developer debt financing, providing structured debt as an alternate route to participate in real estate growth. We see a increasing interest of family offices in investing in startups and technology ventures and here is potential play for Proptech startups to craft a compelling value proposition. Some examples are Reliance Family Office is investing in luxury residential and commercial real estate in Mumbai and Ayodhya, capitalizing on religious tourism and urban growth. Adani Family Office is acquiring land in Gujarat and Mumbai for logistics hubs, data centers, and township development. RNT Associates (Ratan Tata) backed Nestaway, a co-living platform, reflecting interest in urban rental housing. Sharrp Ventures (Mariwala family) and RAAY Investments (Patni family) are exploring senior living and ESG-aligned real estate.”


Family offices not only bring capital but also focus on offering strategic guidance, operational oversight, and access to networks.


TECHNOLOGY TO STRENGTHEN INVESTOR CONFIDENCE

Mittal stated, “I see many family offices actively investing in their technological infrastructure, with many recognizing that inadequate investment in tech poses a significant risk. Leveraging technology not only helps with efficient maintenance and retrieval of data but also enables the use of advanced tools for data analytics and informed decision making. Cybersecurity remains a critical consideration as family offices handle sensitive and valuable information. While adoption levels vary across family offices, there is a clear trend toward increased investment in technology as families recognize its importance.” As per Sheth, next generation is focused on sustainability (ESG), wellness, long term value creation, innovation and professional governance. “Technology and transparency are cornerstones for family office investment decision making. The comfort of having digital dashboards, usage of AI / predictive analytics, strong governance, professional conduct and set up makes it easier for them to trust and invest with those developers.”

Mishra shared his company’s tech initiatives, “Lighthouse combines data and technology to make evidence-based, transparent, and future-ready real estate investment decisions. We are creating our own platform called “therealm. in” which is specifically aligned to this objective. REALM is India’s first luxury real estate concierge platform. We offer end-to-end portfolio management for high-value luxury real estate assets, combining expert advisory, AI-driven intelligence, and white-glove service to help clients manage, invest, lease, and sell with confidence.”

REAL ESTATE OPPORTUNITIES THAT PROMISE STRONG GROWTH

Goenka was of the view that cities such as Mumbai, Pune, Bengaluru, NCR, and emerging logistics corridors in the West and South remain attractive. “Over the next decade, we expect family offices to evolve into institutional-scale asset managers in their own right—professionalizing governance, leveraging analytics, and collaborating directly with developers who can deliver both legacy value and consistent returns.” Sheth said, “Family offices are definitely moving towards newer asset classes. Yield generating assets- like hospitality (hotels, managed living), digital infrastructure (Data centres, GCCs) are gaining traction primarily because - these assets provide regular yield to the investors and the headroom available for growth is immense. Also, there is an institution grade counter party in the transaction which substantially de risks the investment.”

Mishra shared his perspective, “Family offices in India are increasingly focusing on sectors like industrial/logistics, luxury residences, healthcare, and data centres, with investments concentrated in regions such as Delhi NCR, Mumbai – Navi Mumbai (MMR), Bengaluru, Hyderabad, Chennai, Coimbatore, and Pune.” Mittal added, “The top metropolitan cities—Mumbai, Pune, Bengaluru, and Chennai— are expected to continue offering attractive prospects due to sustained urbanization, infrastructure development, and robust demand across residential and commercial real estate. While cities like Delhi NCR, Hyderabad, and Kolkata may experience slower momentum currently due to market cycles and inventory pressures, these are anticipated to improve over time. Over the longer term, tier 2 and tier 3 cities should emerge as significant growth hubs as expanding city boundaries, infrastructure progress, and connectivity drive demand.”



COLLABORATIONS BETWEEN DEVELOPERS & FAMILY OFFICES

Traditionally, real estate was seen as a highly local and unstructured business, but the introduction of RERA and other regulations has brought increased transparency, formalization, and professionalism. The sector is now more accountable, and large corporate houses entering development is testament to growing confidence and trust. “Developers should not be treating family offices like institutional investors, said Sheth. “They should not be ignoring focus on legacy creation. Transparency and Governance will hold key for developers to attract family office investments. Developers need to understand evolving roles and expectations of next-gen decision makers. Focus should be to build trust through relationship-first engagement – focus on long term collaboration and not transaction focused approach. Focus to create co-investment opportunities with clear exit strategies.

Technology, ESG focus, community development would be important levers for developers to invest in. While large, institutional-grade developers naturally meet many of these standards, smaller players must build credibility through streamlined governance, documentation, and reporting to appeal to family offices. Developers need to ensure that they do not over-commit and under deliver. The good ones always take their investors along, ensure they are delivering projects on time, at the quality promised and investors are making the IRRs that they had indicated at the time of fund raise. The investor community is a well-knit one and reputation spreads very quickly.” As per Goenka, “For developers, the key is alignment—clear governance, transparent exit timelines, and a vision that resonates with the family’s values and long-term objectives.” “Developers aiming to attract family office investments must embrace this change by focusing on authentic relationship-building, open information sharing, and direct alignment with the investment mandates of family offices.

Those who resist this shift may struggle to raise capital in a market that values compliance, governance, and transparency. With the industry becoming more regulated and structured, family offices are increasingly willing to collaborate with developers, especially since not every family office intends to take on development themselves. This era of formalization offers significant opportunities for developers ready to adapt, build trust, and demonstrate operational excellence, positioning them as partners of choice for patient, strategic capital, expressed Mittal. “Family offices favour developers with strong governance, transparency, quality execution, and long-term vision over speculative plays. Lighthouse aligns both sides by vetting credible developers, structuring clear, risk-balanced partnerships, and ensuring projects meet each family office’s return, sustainability, and legacy goals. In essence: trusted, transparent, and purpose-aligned collaborations drive lasting value,” concurred Mishra. His advice for developers was to build trust through transparency, strong governance, and long term alignment. Show proven execution and be flexible to meet family offices’ needs. “Maintain clear communication, clean t itles, and timely updates. Offer stable, sustainable projects that match family offices’ legacy and return goals. Adopt professional management and robust compliance standards. Show strong execution capability and track record.” He added, “Lighthouse combines robust governance, full transparency, and proactive risk management to safeguard family office capital and legacy in complex real estate deals. We use or advise the client for partners where Comprehensive legal, f inancial, and operational checks are done before investment.”


“For develop ers, the key is alignment—clear governance, trans parent exit timelines, and a vision that resonates with the family’s values and long-term objectives. Amit Goenka”

“With the industry becoming more regulated and structured, family offices are increasingly willing to collaborate with developers, especially since not every family office intends to take on development themselves. Sharad Mittal”

“Family offic es in India are evolving to become more structured, diversified, and im pact-driven, with a strong emphasis on governance, technol ogy, and sustainable investments in the real estate sector. Sumesh Mishra”

“Unlike institutional investors, family offices are not chasing quarterly returns. They are patient investors with focus on long term value creation. Chaitanya Seth”


THE OUTLOOK: FAMILY OFFICES SHAPING INDIAN REALTY SECTOR

Undoubtedly, family offices have brought structure and discipline to how UHNIs invest, and have helped them by proactively deploying diversified plans, to manage wealth effectively. While real estate has long been a staple in family portfolios for wealth preservation, the family offices strategies are moving away from traditional direct ownership towards more sophisticated real estate investment methods. Goenka emphasized “Family offices are emerging as one of the most sophisticated and patient pools of capital in India’s real estate landscape.” Mittal agreed, “Over the next decade, family offices will play a transformative role by demanding structured, professional investment approaches that span direct investments, co-investments, and partnerships with experienced investment managers.

They are becoming active throughout the investment lifecycle, from initial capital deployment to managing exits, which signifies deeper involvement and sophistication. This maturation will lead to increased transparency, governance, and formalization within the Indian real estate sector as family offices seek reliable, compliant, and well managed opportunities. Their growing investments will help institutionalize the market further, attracting quality developers and fostering collaborations focused on alignment of interests and long-term value creation.” Mishra said, “Family offices are increasingly diversifying into global equities, real estate, private equity, venture capital, and other alternative investments. The AUM of mid to large-sized family offices in India is projected to grow at a Compound Annual Growth Rate (CAGR) of 14% over the next three years, potentially increasing by 1.5 times.

Thus, in next 5–10 years, family offices in India are poised to play a pivotal role in the real estate ecosystem, driven by evolving investment strategies, governance frameworks, and technological advancements.” On a concluding note, Sheth stated, “Unlike institutional investors, family offices are not chasing quarterly returns. They balance investments which provide stable, income-generating assets and focus on long term value creation. They are bit more patient investors and will equally focus on legacy building through projects that reflect family values— education, healthcare, sustainability. This dual focus makes them ideal partners for long-term, purpose driven real estate development. Being patient investors, they can allow developers to also focus on ambitious or unconventional projects.”


The future of family offices in India is promising as they continue to adapt. Their challenge lies in harnessing opportunities to fulfill growth objectives, while staying committed to the family’s wealth preservation – and real estate can provide both.