What 'good yield' actually means in Indian real estate right now
Yield-chasing looks simple on paper. In practice, tenant credit, remaining lease term and exit liquidity matter more than the number on the cover page.
Every quarter we speak to HNIs and family offices weighing pre-leased commercial as an alternative to fixed income. Most conversations start with the same question: what's a good yield?
The honest answer is that yield alone is a poor filter. A 9% yield on a tenant with 18 months left on the lease and a weak covenant is worse than a 7.5% yield on a listed multinational with seven years remaining and a lock-in.
We evaluate four variables on every asset: tenant credit, remaining lease term, escalation structure, and exit market depth. A well-built Grade-A office in a listed IT park with a Fortune 500 tenant is a different asset class from a standalone retail unit — even if the yield reads similarly.
For most family offices we advise, the sweet spot in 2026 is Grade-A commercial in tier-1 cities and select tier-2 corridors (Surat, Ahmedabad, Coimbatore) with tenants on 5+ year residual term, 15% three-year escalation, and clear title.
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