Rental yields vary more than most investors assume. Here's the ground truth across the top six Indian commercial markets in 2026, and what's driving the variance.
Commercial (Grade-A office) yields
- Bengaluru (Whitefield / ORR): 8.5–9.5% gross. Deep GCC demand, healthy absorption.
- Hyderabad (HITEC / Gachibowli): 8.7–9.8% gross. Fastest net absorption in the country.
- Pune (Kharadi / Hinjewadi): 8.2–9.0% gross. IT/ITES-led, slightly thinner exit market.
- Mumbai (BKC / Powai / Andheri): 7.5–8.5% gross. Pricing premium caps headline yield.
- Gurgaon (Cyber City / Golf Course Ext.): 8.0–9.0% gross. Strong MNC tenancy.
- Chennai (OMR / Guindy): 8.0–9.0% gross. Manufacturing + services balance.
Residential yields
Residential yields are structurally lower than commercial — typically 2.5–4.5% gross across premium housing in top cities. The return profile leans on capital appreciation, not cash flow.
Premium land parcels
Land produces no current income (apart from occasional lease-to-own arrangements). Underwriting is entirely based on capital appreciation — a different discipline from yield investing.
What moves yields
- Vacancy rate in the micro-market (higher vacancy = lower rents + lower yield).
- Tenant mix (Fortune 500 tenants → lower cap rate / lower yield, but safer).
- Lease term remaining (shorter WALE → higher yield to compensate for re-leasing risk).
- Asset age and capex cycle (older buildings need more capex, pushing net yield down).
Cap-rate ranges (entry to exit)
Most Grade-A office deals today trade in a 7.25–8.25% entry cap rate range. Exit cap rate assumptions should be within ±50 bps of entry — anything more aggressive is a pricing bet, not an income one.
All figures are indicative; actual deal yields depend on building, tenant, lease and structure. Always ask the platform to show the underwriting for the specific asset you are subscribing to.