loader2
Login Open ICICI 3-in-1 Account
  • Text Size
  • Text to Speech
  • Color Contrast
  • Pause Animations

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Real estate shrugs off middle east war concerns (outperforms broader market)

ICICIdirect Research 03 Jul 2026 DISCLAIMER

Realty sector is one of the sectors, which has started witnessing investor interest post news surrounding signing of ceasefire agreement between US and Iran during mid-June 2026. Evidently, realty index has risen 17% since June 11, 2026, outperforming 4% rise in Nifty 50. During the same period, large cap outperformers are Godrej Properties (up 24%), Oberoi (up 22%), DLF (up 20%) and Phoenix Mills (up 18%) while Mid & Small cap outperformers are Aditya Birla Real Estate (up 19%), Raymond Realty (up 20%), Mahindra Lifespace (up 17%) and Keystone Realtors (up 14%).
 
Easing geopolitical situation on real estate sector and recent trends

War-like situation had delayed home-buying decisions which are now likely to get normalized. The same is likely to aid in companies maintaining their pre-sales targets for FY27.
Cost of key construction inputs such as steel and cement had risen along with specialized imported materials faced both rise in costs and availability issues. Developers had earlier assessed mid to high single digit cost increase in overall blended cost structure. Assuming prices do not correct (over the execution timeline of 4-5 years), the impact on margins was estimated to be in the range of 0.5-1%. The easing of geopolitical tensions may ease concerns of cost pressures and may provide developers room for price increase (assuming demand improvement).
Provides domestic macro-stability via moderating inflationary scenario, continuation of favorable interest rate regime and stronger investor confidence.
Strong project launches highlight developers’ confidence: During Q1FY27, housing sales data from PropEquity (up 19% YoY across 9 cities to 1.12 lakh units) and Anarock (down 6% YoY across 7 cities to 90,715 units) show contradictory view. However, both concur on new launches with PropEquity estimating 43% YoY jump and Anarock 7% YoY rise. Rise in project launches underpin developer’s confidence on India’s structural residential demand brushing aside West Asia conflict impact and is likely to result in healthy pre-sales growth for listed realty players.
Bengaluru – an outperformer during Q1FY27: Bengaluru witnessed pre-sales growth of 47% YoY (PropEquity) and 1% YoY (Anarock). Supply grew by 71% YoY (PE) and 41% YoY (Anarock). Key regional players like Prestige Estates, Brigade enterprises, Sobha are likely to be beneficiaries.
NCR – weak during Q1FY27: NCR witnessed pre-sales decline of 14% YoY (PropEquity) and 6% YoY (Anarock). Supply declined by 6% YoY (PE) and 40% YoY (Anarock). Key regional players like DLF, Max Estates, Signature Global may get affected.
Mumbai – maintains growth momentum during Q1FY27: Mumbai property registrations were up 10.6% YoY during Q1FY27 despite elevated prices and high base. Stamp duty collections were up 2.6% YoY indicating broader participation by end-users, instead of demand concentrated only in high-value properties. As per PropEquity, Mumbai recorded 32% YoY rise in sales and 111% YoY rise in supply during Q1FY27. Key beneficiaries include Oberoi realty, Lodha Developers, Godrej Properties, Keystone realtors, among others
Office leasing resilient: As per colliers India, Grade A Office leasing across seven markets was down 2% YoY during Q1FY27, although it marked ninth consecutive quarter of crossing 15 msf mark. Demand remained supported by Global Capability Centres (GCCs), technology companies and flexible workspace operators. GCCs are likely to account for 40-50% of space absorption in 2026. Key beneficiary to be DLF, Brigade Enterprises, Prestige Estates.
Retail leasing gather pace: As per Cushman & Wakefield, India’s retail recorded 17.6% YoY rise (up 23.2% QoQ) in gross leasing volumes to 2.4 msf in Q1FY27 despite no new Grade A supply during the quarter. Vacancy levels in Grade A malls declined 163 bps YoY to 5% with prime high-street rentals rising 5.1% YoY (up 2.1% QoQ). Key beneficiary Phoenix Mills.   
At the current juncture, we prefer DLF, Brigade Enterprise, Oberoi, Phoenix Mills, Aditya Birla Real Estate, Arvind Smatspaces, Shriram Properties and Keystone Realtors

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere