As alternate segments in real estate gain momentum, healthcare real estate and hospitality real estate are emerging as twin segments promising high growth 

The potential of healthcare and hospitality real estate can be gauged from the fact that India will need an additional 2.6 billion sq. ft. of healthcare real estate and 120-125 million sq. ft. of organised hospitality space by 2035, creating significant opportunities for developers and investors, according to two analyses by CBRE South Asia. While the healthcare sector will require nearly 2.9 million additional hospital beds to bridge the gap with global infrastructure benchmarks, the hospitality sector is expected to add around 190,000-210,000 hotel rooms, driven by growing business, leisure and experience-led travel demand.

Healthcare real estate

India is projected to require an additional 2.6 billion sq. ft. of healthcare real estate by 2035, driven by the need for nearly 2.9 million incremental hospital beds, to align with the current global healthcare infrastructure benchmark, according to CBRE South Asia’s latest report titled “Beyond Core: A 2035 View of India’s Alternate Sectors”.

India currently has approximately 1.6 hospital beds per 1,000 people, significantly below the global average of 3.3 per 1,000. To close this capacity gap, the country’s total healthcare real estate footprint would need to expand substantially from an estimated 2.1 billion sq. ft. in 2025, the report highlights. The requirement presents a significant opportunity for developers, investors and healthcare operators to create purpose-built and scalable healthcare assets across markets.

The report’s analysis of non-communicable disease (NCD) prevalence and hospital bed density highlights significant disparities in healthcare infrastructure across states. Chhattisgarh, Odisha, Madhya Pradesh and Jharkhand have low hospital bed density compared with their disease burden, indicating potential unmet demand for secondary and tertiary healthcare services. Meanwhile, states such as Karnataka, Kerala, Tamil Nadu and Telangana have relatively stronger healthcare infrastructure and higher household incomes, supporting further expansion of specialised healthcare facilities and medical ecosystems.

“Healthcare is emerging as one of India’s most consequential real estate opportunities, not simply because demand for care is increasing, but because the country needs a far deeper and more distributed physical healthcare network,” said Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa, CBRE.

 Built-to-suit (BTS) structures can play an important role in addressing this requirement by providing operators with specialised, purpose-built clinical infrastructure aligned with their operational and regulatory needs. This would allow healthcare providers to direct more capital towards clinical services, medical equipment and technology, while offering property owners greater income visibility through long-term leases,according to Anshuman Magazine.

Beyond conventional hospitals, the sector is also witnessing the growth of diagnostic centres, day-care surgery centres, wellness and preventive healthcare formats, including health screening centres, rehabilitation clinics, eye-care centres, IVF centres and vaccination facilities, particularly in urban locations.

The report identifies a shift in healthcare investment and expansion strategies, with growing interest in single-speciality hospitals, day-care and outpatient facilities, and acquisition-led expansion. Given the highly competitive landscape in certain cities, operators are increasingly evaluating existing hospitals to enter established markets faster, leveraging operational infrastructure, licences and patient networks.

Although nascent, medical office buildings can also be developed in the country, housing single or multiple healthcare tenants such as diagnostics, rehabilitation, child development, IVF, eye-care, dental and wellness providers. These assets allow multiple services to be co-located within one development, improving patient convenience while strengthening asset utilisation.

“India’s healthcare infrastructure requirement cannot be addressed through a uniform development model,” said Rami Kaushal, Managing Director, Consulting and Valuation Services, India, Middle East and Africa, CBRE. “The current landscape creates scope for a diversified development pipeline, ranging from large integrated healthcare campuses and multi- and single-speciality hospitals to medical office buildings, diagnostics and day-care facilities. In addition to top cities, tier-II and tier-III locations are particularly important in this context, where lower land costs and the availability of larger parcels can support cost-efficient, purpose-built healthcare developments.”

India’s hospitality opportunity    CBRE Research’s report – ‘Beyond Core: A 2035 View of India’s Alternate Sectors ‘ says that India’s organised hospitality sector is estimated to require approximately 120-125 million sq. ft. of additional real estate by 2035, equivalent to around 190,000-210,000 incremental hotel keys.

The report highlights a broad-based development cycle across economy, midscale, upscale, upper-upscale and luxury hotel categories. The opportunity will be shaped by market selection, operating model, land availability and the ability to align with evolving business, leisure and experience-led travel demand.

“India’s hospitality opportunity is becoming increasingly diverse, with growth extending beyond traditional hotel markets and formats. As business, leisure and experience-led travel evolve, developers and operators are taking a more market-led approach to identifying opportunities. This involves understanding the demand drivers of each destination and building strong operating partnerships. The focus is moving beyond adding inventory to creating differentiated hospitality assets that remain relevant to changing traveller preferences and deliver sustainable long-term value,” said Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa, CBRE.

Growth beyond metros

Gateway cities account for approximately 35% of branded hotel inventory but generate about 50% of sector revenues, supported by corporate, MICE and transit demand, the report highlighted. At the same time, leisure, cultural and spiritual destinations are creating scalable opportunities for resort-led and experience-driven formats beyond traditional urban centres.

Investment outlook

The report also noted that the hospitality sector attracted approximately USD 905 million in real estate investments between 2024 and H1 2026. Investor interest is increasingly shifting towards platform-level commitments, strategic joint ventures and income-generating assets, while management contracts and franchise partnerships are enabling operators to expand with lighter balance sheets.

The report underscored that management contracts, franchise partnerships, brownfield acquisitions and rebranding are important routes for operators and investors seeking to build scale and accelerate market entry. It also identified selective premiumisation across luxury, lifestyle and premium resort formats as a potential source of stronger pricing power.

“Domestic tourism is emerging as a structural driver of India’s hospitality sector, supported by rising discretionary spending, improved connectivity and growing interest in leisure, wellness and destination-led travel. Operators are increasingly pursuing strategic premiumisation across luxury, lifestyle and resort formats to capture evolving traveller preferences. Supported by healthy demand fundamentals, this trend is expected to strengthen pricing power and support ADR growth across segments,” said Rami Kaushal, Managing Director, Consulting and Valuation Services, India, Middle East and Africa, CBRE.

As the urbanization takes a leap in the coming years, with Tier-2 and Tier-3 Cities expanding at a faster pace, health and hospitality real estate will make greater strides.