Beyond REITs: Why family offices are investing in buildings

A structural shift is underway inside India’s most sophisticated family offices—quiet, deliberate, and likely to define how the next generation of private capital allocates to real estate. For most of the last two decades, that capital had two destinations: residential property and, more recently, listed REITs. Both served a purpose. But neither has proven capable of delivering what serious, long-horizon capital demands—durable income, balance sheet utility, and the ability to compound wealth meaningfully over a 7-10-year horizon. A third option has now come of age: the direct ownership of Grade-A office condominiums within professionally managed commercial developments. 

The recalibration of family office real estate allocations 

According to the Campden Wealth & UBS Global Family Office Report, between 10% and 20% of family office portfolios are typically allocated to real estate. What is changing is the standard applied to that allocation. Residential property has faced a structural yield challenge—rental yields in India’s major cities have hovered between 2 and 3% for years, a number that, net of maintenance and vacancy, frequently fails to keep pace with inflation. While residential assets can appreciate, they do so without generating the current income or balance sheet utility that long-horizon capital requires. Grade-A office condominiums offer both: contractual income yield combined with the capital appreciation potential of a professionally managed, institutionally tenanted asset in a supply-constrained micro-market. 

Listed REITs offer greater transparency, with distribution yields of 4-5.5%, but remain a passive vehicle—the investor holds units, not assets, with no ability to lever cashflows, use the asset as collateral, or influence management. The question being asked by family office promoters and investment committees today is, which real estate format actually earns its place on a sophisticated balance sheet? The answer, for a growing cohort, is direct ownership of Grade-A office condominiums—where professional asset management is embedded from day one. 

The emergence of Grade-A office condominium ownership 

The yield differential is where the conversation starts—not where it ends. When the tenant is a Fortune 500 corporation or a globally recognised technology enterprise, the cashflow is contractually anchored by a lease with built-in rental escalation, backed by a counterparty with institutional creditworthiness. This is not a distribution subject to market sentiment—it is a long-term contracted income stream carrying a risk profile materially lower than most alternative assets generating comparable yields. On a risk-adjusted basis, the advantage over REITs is considerably wider than the headline numbers alone suggest. 

Unlocking capital efficiency through leverage 

Direct ownership also unlocks a financial architecture unavailable to passive vehicles. Through lease rental discounting (LRD), a family office that acquires a fully-leased Grade-A office condominium can advance capital against contracted future cashflows—recycling invested equity and lowering the effective equity base. Applied against an asset yielding 6.5-8% gross, this structure can generate equity IRRs of 16-22%, depending on leverage levels and holding periods. Equally important, the asset sits directly on the investor’s balance sheet—providing collateral value, estate planning relevance, and a resale pathway independent of public market liquidity. 

The demand engine: India’s GCC revolution 

The durability of any real estate investment depends on tenant demand. In India’s case, that demand is structural, not cyclical. GCCs—the offshore captive operations of multinationals spanning technology, finance, legal, analytics, AI, and R&D—have fundamentally altered India’s office market. From roughly 1,000 centres a decade ago, India now hosts over 1,700 GCCs employing more than 1.9 million professionals across Bengaluru, Hyderabad, Pune, Chennai, and the NCR, accounting for an estimated 35-40 million sq. ft of annual leasing—approximately 40-50% of total market absorption. In 2025 alone, India’s top six cities recorded gross absorption of 82.6 million sq. ft, with vacancy tightening in the prime micro-markets where Grade-A supply is concentrated. 

For family offices employing thematic investment strategies, Grade-A office condominiums offer direct exposure to one of India’s most powerful structural tailwinds: the GCC-driven demand for premium office space. 

A structural opportunity for long-term capital 

Two markets that have preceded India in this evolution are instructive. In the US, owner-occupiers accounted for an estimated 20-30% of office acquisitions in early 2025, as long-horizon capital moved to secure best-in-class assets. In Singapore, the city-state has operated a mature individual office ownership market for decades—premium floors across Marina Bay and Tanjong Pagar are held by private investors and family offices, professionally managed and leased to corporate tenants. URA data shows strata office transactions exceeded SGD 1.2 billion in 2024, with volumes up approximately 35% between 2022 and 2024. Neither market benefits from the wide rental yield differential between office and residential that India offers, and yet both are mature, growing office ownership markets. India is at an earlier—and therefore more compelling—point in this trajectory. 

What it requires to work: the asset management imperative 

The investment case is compelling — but it rests on a critical condition: the quality of the operating platform managing the asset after purchase. An office condominium is a fractional ownership stake in an operating asset. The entire investment thesis—yield, tenant quality, income durability, capital appreciation—is contingent on how that asset is managed after the transaction closes. A 

building that is well-designed at point of sale but poorly managed across its life will lose tenants, defer maintenance, and deliver a return profile that looks nothing like what was underwritten. 

The model works when the developer retains ongoing, accountable responsibility for asset management: leasing strategy, tenant curation, facilities management, capital expenditure, ESG compliance, and resale support. A developer who builds to hold—whose balance sheet and reputation are tied to the asset’s performance—has genuine skin in the game. One who builds, sells, and disengages cannot maintain Grade-A standards over a 7-10-year holding period. For family offices evaluating this category, the due diligence question is a two-part test: the asset—location, specification, tenancy, lease terms—and the platform—track record, governance structure, and capital expenditure discipline. Both matter equally. 

The supply of genuinely institutional-grade, professionally managed office condominiums is growing across India’s Tier I cities. As India’s family offices continue to sharpen their investment frameworks, the allocation to office condominiums is poised to grow significantly—a category whose time, structurally, has arrived. 

(The author is a member of the supervisory board of RMZ, a real estate platform. Views are personal.)