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Author Riya Kapoor | Published at: 2nd February 2026, 10:17 am

Overview

Global brokerage CLSA has signaled a positive trajectory for India’s real estate market, driven by Budget 2026 policy initiatives. The firm named DLF and Embassy REIT as its preferred sector investments. Key measures include enhanced tax clarity for Global Capability Centres (GCCs) and a significant tax holiday for data center development until 2047. While restrictions on Minimum Alternate Tax (MAT) credits may pose mid-term challenges, CLSA anticipates long-term gains from these developments to outweigh such headwinds.

1. THE SEAMLESS LINK
The real estate sector is poised for sustained expansion following the introduction of targeted policy measures in the Union Budget 2026. These fiscal adjustments are expected to bolster key growth segments, particularly those catering to Global Capability Centres (GCCs) and the burgeoning data center industry. Analysts at global brokerage CLSA have acknowledged these developments, reiterating a constructive outlook and identifying DLF and Embassy REIT as prime investment opportunities within the sector.

Budget Catalysts for Real Estate Growth

The Union Budget 2026 introduced several provisions aimed at stimulating long-term growth. Foremost among these is enhanced tax clarity and streamlined compliance for Global Capability Centres (GCCs), a move anticipated to attract further multinational investment into India. Compounding this, a substantial tax holiday has been extended to foreign companies establishing data centers in India, valid until 2047. These incentives are designed to foster infrastructure development and attract foreign capital, directly benefiting commercial and industrial real estate segments.

Developer Strategies and Valuation Metrics

These policy benefits are seen as particularly advantageous for property developers focused on building annuity-based assets and those looking to monetize land parcels for data center development. CLSA specifically highlighted DLF, a major integrated real estate developer, and Embassy REIT, a leading Real Estate Investment Trust. DLF, with a market capitalization of approximately ₹1.51 lakh crore and a P/E ratio around 35.41x as of January 2026, is a significant player in residential and commercial development. Embassy REIT, boasting a market capitalization of around ₹41,600 crore and a P/E ratio of approximately 18.5x, focuses on income-producing commercial office spaces, hospitality, and renewable energy assets. Competitors in the developer space include Prestige Estates, Oberoi Realty, and Godrej Properties, while Embassy REIT competes with other REITs like Mindspace Business Parks REIT and Brookfield India REIT.

Navigating Financial Nuances and Outlook

CLSA acknowledges that the positive fiscal measures are partially counterbalanced by restrictions on the utilization of Minimum Alternate Tax (MAT) credits. This limitation could present a challenge to company earnings over the medium term. However, CLSA projects that the long-term advantages derived from the expansion of GCCs and data center infrastructure will more than offset this impact. The brokerage’s overall assessment views the policy direction as decidedly positive for the real estate segment, emphasizing that the long-term gains are expected to prevail, making the sector an attractive proposition for investors.

Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.

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