https://www.freepressjournal.in/business/union-budget-2026-boosts-manufacturing-and-data-centres-real-estate-sees-growth-across-tier-2-3-cities
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New Delhi: The Union Budget 2026 has taken a balanced approach by focusing on long-term economic growth while ensuring development across different regions and sectors. Industry experts believe the Budget strengthens India’s growth story through higher manufacturing, infrastructure investment, energy security and urban development.
Mr Badal Yagnik, CEO & Managing Director at Colliers India, said the Budget clearly supports large-scale manufacturing, champion MSMEs and infrastructure projects such as Dedicated Freight Corridors, high-speed rail and inland waterways. These steps are expected to directly benefit the real estate sector, especially industrial and logistics segments.
Manufacturing And Data Centres To Drive Demand
According to industry leaders, real estate demand is likely to rise from sectors like textiles, healthcare, semiconductors, rare earths, AI and AVGC (Animation, Visual Effects, Gaming and Comics). A major highlight is the proposed tax holiday for foreign cloud service providers till 2047, which is expected to boost investment in data centres and attract global tech companies to India.
This move positions India as a strong hub for digital infrastructure and cloud-based services. Data centres, warehouses and tech parks are expected to see strong demand in the coming years.
Tier 2 And Tier 3 Cities Gain Importance
The Budget has also placed strong focus on Tier 2 and Tier 3 cities. With Rs 5,000 crore funding planned per City Economic Region over the next five years, urban growth is expected to spread beyond metro cities. Tourism, skill development and infrastructure in temple towns and emerging cities will further support housing, hotels and retail real estate.
Mr Shrinivas Rao, CEO of Vestian, said these reforms will attract Global Capability Centres (GCCs) to smaller cities due to lower costs and better connectivity.
REITs And Asset Monetisation To Deepen Markets
Mr Tanuj Shori, Founder & CEO of Square Yards, highlighted that monetisation of public sector real estate through REITs and InvITs will make real estate investment more accessible to retail investors. New listings are expected across office, retail, logistics, data centres and infrastructure assets, offering regular income and long-term value.
This is expected to improve transparency, governance and investor confidence in the sector.
Premium Housing Sees Stable Outlook
Mr Amit Goyal, Managing Director of India Sotheby’s International Realty, said policy continuity and fiscal discipline will support premium and luxury housing. Better urban living conditions and economic stability will continue to attract high-end buyers despite global uncertainties.
Overall, although direct real estate announcements were limited, the strong push for manufacturing, digital infrastructure, urban development and asset recycling is expected to fuel steady growth across all real estate segments.
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