How family offices can build a lasting real estate legacy

How can family offices transform real estate ownership into a strategic wealth-building tool? Discover insights on portfolio optimization, tax efficiency, liquidity and succession planning.

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Family enterprise

Entrepreneurship

For many Indian families, real estate has long been the cornerstone of wealth creation. As family wealth grows and investment opportunities become more diverse, the question is no longer just what to invest in, but how to build a real estate legacy that endures across generations.

In this episode of the EY Family Office podcast series, Surabhi Marwah, Partner and Leader, Family Office Advisory Services, EY India, is joined by Amit Goyal, Managing Director at India Sotheby’s International Realty and Ruchi Jain, Partner, Tax, EY India, to explore how families can move from simply owning real estate to developing a structured, long-term real estate strategy.

The conversation covers key considerations for family offices and ultra-high-net-worth individuals (UHNIs), including portfolio diversification, concentration and liquidity risks, performance measurement, monetization strategies and the role of Real Estate Investment Trusts (REITs) and alternative investment structures. The speakers also discuss how tax, regulatory, governance and succession planning considerations can significantly influence investment outcomes and intergenerational wealth transfer.

The episode concludes with practical insights on building resilient real estate portfolios, avoiding common pitfalls, optimizing ownership structures and preparing the next generation to manage family wealth effectively.

Whether you are a family office, entrepreneur, or investor, this discussion offers valuable perspectives on creating a real estate strategy that balances growth, liquidity, governance and long-term legacy.

Key takeaways

Avoid concentration risk and regularly evaluate portfolio performance against relevant market benchmarks, not just absolute appreciation.
Maintain adequate liquidity and recognize that real estate is inherently a long-term, less liquid asset class.
Choose ownership structures (individual, trust, LLP, company) based on investment objectives, monetization plans and succession goals.
Consider tax, regulatory, GST and governance implications before acquiring or monetizing assets.

For your convenience, a full text transcript of this podcast is available on the link below:

Surabhi Marwah

Hi, I am Surabhi Marwah, Partner and Leader, Family Office Advisory Services, EY India and I am super excited to have you all listen to the EY Family Office podcast series. For many Indian families, fortunes have been built on real estate. As family wealth grows, more sophisticated opportunities get more diverse; the question is no longer what to invest in; it is how we build a real estate legacy that stands the test of time. Today, we will explore exactly that with our energetic and knowledgeable guests. If this were a stage, I would say, “Put your hands together for Amit Goyal, the Managing Director of India Sotheby's International Realty”. Amit, I am super excited to have you here. I know we have spoken many times, and I know your passion for this subject. I know your knowledge and maybe at the end of it, you will give me some investment tips as well. Joining Amit, we have Ruchi Jain, Partner, International Transaction Tax, EY India and focuses on real estate and family offices. With that, Amit, let me start with a very fundamental question.

Amit Goyal

Sure.

Surabhi Marwah

For many successful families, real estate has been accumulated over decades. We know that historically, for most families, this was the one asset class that they could really bet on and count on. Now, in your experience, as we fast forward to today, how common is it for family offices, ultra-high net worth individuals to confuse the owning of real estate with having a very structured real estate strategy? What is the difference? What are you seeing? And as we come along, I will ask you about how you advise people to take this forward. Over to you.

Amit Goyal

Thank you for having me. You are correct. People get emotionally attached with their real estate portfolios and they just keep accumulating assets based on recommendations from friends, inheritance, business success. And somebody is buying, you also end up buying. But I think the distinction is extremely important for people to understand that it is not just about owning real estate; it is about having something in your portfolio which makes sense and which goes down well with your overall portfolio strategy. So, the strategy of asset allocation and then buying something which is not really creating concentration in the portfolio. In one city, or in one location, or one kind of property. Many people we see often just own under construction apartments. So, anything is getting launched, people will go and just give one cheque and pick up one or two apartments. Usually, developers would say four or five years for them to get completed. In some cases, developers are able to deliver on time, but in some cases it takes far longer. So, the portfolio remains unproductive for a fairly long time, and capital is locked in. The apartment is not for use. You cannot rent it out, and there is no return. There is no yield and productivity. So, one has to have a strategy and then follow that.

Surabhi Marwah

I absolutely agree with the herd mentality and that I think is happening with everyone, whether it is HNIs or professionals with the big businessmen. That is one of your biggest challenges: how to change that whole mindset to say, you have to move away from what used to happen 30 years ago because the world has changed, the Indian market has changed, and also the whole concept of diversification of wealth and getting the right portfolio stream. We will talk about it a little bit more.

Ruchi, over to you. We talked about the commercial and the emotional rationale. There is a lot of emotion when it comes to wealth. I mean earning it also requires a lot of emotion and spending it requires most. But when families begin evaluating real estate holdings more strategically, how do tax and regulatory considerations play a role? Because it is no longer about just giving a cheque. It is about where the asset is — whether the asset is in India or overseas? Do you put it in a company or do you buy it off your name? Do you buy it in the name of the family? What are the overarching principles?

Ruchi Jain

When we look at family offices, how are they holding real estate? When are they acquiring? Where are they during the course of the investment? When do they want to sell it? Commercially, what is their objective in holding those assets? Tax and regulatory considerations enable and maximize that commercial consideration. For example, if it is a family estate which you want to pass on, there will be a different structure and tax aspect to look at. If you are acquiring an asset or holding an asset and you are looking for monetization, then you will look at a different structure. How tax plays out at the time of monetization and holding is another important consideration when you are looking to exit. So, whether it is long-term or short-term; you are holding as an individual or a company, LLP (Limited Liability Partnership), your tax aspects change. All these aspects optimize your returns, which is why it is very important when you are looking at a real estate asset portfolio. Commercially, what are the objectives? We create a structure and tax and regulatory considerations to optimize the yield and achieve those commercial objectives.

Surabhi Marwah

What I am hearing from the two of you is: one is the strategic decision on where to put and how to put. The other is when you are buying, think about how you want to buy it rather than 10 years down the line when it is already done.

Ruchi Jain

Absolutely. Planning begins before you start. It is not only the asset that you are buying, but how you are buying it.

Surabhi Marwah

Amit, we have talked about that a lot. In fact, during many engagements that we have had with potential buyers or clients, to say how they should look at it. Whether it is Liberalized Remittance Scheme (LRS) or Overseas Direct Investment (ODI) – this is the structure which you should take into account today because it is going to haunt you or make you very happy 10 years down the line.

Amit, I am going to come back to you. You talked about strategy. You talked about not getting emotions into it. But even today, and you deal with the topmost families in India and overseas – what are the biggest blind spots that you see in real estate portfolios today? And do families still overlook risk and opportunity for the emotional angle or because of herd mentality?

Amit Goyal

First and foremost, would be concentration. The portfolios we often see are concentrated. And to give you an example of data. We do an annual survey at Sotheby's International Realty. And this year, the survey results show that 53% of our respondents wanted to consolidate their portfolios. This is because they have so many assets sitting in the portfolio that they have been buying. So, concentration risk is first.

Second is liquidity. People often think that real estate is a liquid asset class, but it is not. That is not the nature of the beast, right? Sometimes it takes six months, one year, or even longer to liquidate a real estate asset. Having multiple assets in the portfolio is one thing, but liquidity is another thing. When people need liquidity, when markets are volatile and they are not able to access that part of the capital, that is when they get very uncomfortable.

Third is regulatory and approvals. Often you see changes in regulations. Master plans get released and then all the changes that happen. So, one needs to keep up with the regulatory changes in that particular micro market.

Surabhi Marwah

Amit, give me an example. In your recent experience, when people have come to you, what has been one of the biggest shocks that you had?

Amit Goyal

You see a lot of people come and say that they bought a property for INR20 crore five years ago and today it is worth INR35crore or INR40crore, not realizing how markets have moved in those five years. What is the performance versus just the appreciation?

Appreciation is one bit. But you have to always compare it with the benchmark, whether it is capital markets, equity markets, economy or inflation. How is your portfolio performing in terms of market gains, which are more in line with market movements? And often people hold real estate assets for 10/15/20/25 years. So, buying something 20 years ago for INR30crore and seeing it today at INR60 crore/INR65 crore/INR70 crore; maybe an IRR of 8%/9%/7%, which is not perhaps as good as their other asset classes. Sometimes people have a portfolio, which is doing great. Some real estate assets are giving more than 20%/16%/17%/18% IRR on a compounding basis, but some are not, and that measurement is important.

Ruchi Jain

I will just add to his point. Real estate is a cyclical business. If we see the market and compare residential real estate market, from early 2012 till Covid time, there was hardly any appreciation, and the returns were much lesser. But when we look at the Covid time, how the residential market has played out after and now comparing the returns with the Covid period and seeing how it has tripled or increased four times, it is not a comparable benchmark. So, it is important to look at the real estate return over a period of time. Again, playing out the investment strategy with the cyclical market is an important point.

Surabhi Marwah

The moral of the story is when you are looking at assets, buy smartly. Not only that, know when to liquidate it. Because at the end of the day you want to make more or equal to what you are getting in the Indian or global markets, so that your capital is effectively utilized and the lock-in, is also taken into account. So, see the capital appreciation not in terms of whole numbers but in terms of benchmarks and percentages. That is very important for everybody. Ruchi, back to you. You talked about structures. Now, in the work that we do together, we talk about the typical structures – trusts, companies and LLPs. A lot of people still come and ask you and me whether they should buy as asset under an LLP or in their own name. I would ask them why they were looking at an LLP. Again, due to the herd mentality, because somebody did it in an LLP, and there is no reason for that. I asked them for the reason. Is it because of the tax or because of the retiring partner? What is it? But often there is no answer. So, what are the typical structures you see, and what is the overarching advice you give?

Ruchi Jain

When you look at real estate structures, we see all sorts of structures – real estate held in personal names, in a family trust, in an LLP and in companies. Which structure is best? The answer depends on facts and commercial considerations – why am I buying this asset? What is the purpose? How am I going to hold it, monetize it, or pass it intergenerationally? So, if the question is which structure, the answer is all structures are good and suitable, but we have to work out depending on the facts and consideration. If I am buying an asset and going to use it as a commercial asset and I am going to use a rental to build further assets, I might go for a company. But if I want to transfer it out, then I might look at the structure which optimizes my tax. And then there is no double taxation or leakage. So, we really have to work out the commercial considerations and then evaluate the structure.

Surabhi Marwah

I just got this call. There is an individual HNI professional and has one child and wants to buy a rather expensive high-rise property. Now his question to me was if he should buy under an LLP or his name. If that question came to you, what would you say?

Ruchi Jain

Is it a residential house? Is it put to use for self-occupied property? The person is not holding any other asset or any other house because that is a different consideration. If you have more than two self-occupied properties, you might look at it differently. You want to pass it on to your child after your lifetime, depending on that. For a residential house, I might go for an individual structure and hold it in my name directly.

Surabhi Marwah

Moral of the story: Ruchi is saying, please come to me with all your questions. I am not going to give any free answers, but the answers are not one-size- fits-all because you will have to ask more questions.

Amit Goyal

Practically, we see a lot of people and families buying these new houses and large properties in their private family trust. That is something that we have seen as a trend lately.

Surabhi Marwah

Because of the succession, even though we do not have an inheritance tax in India, but there is anticipation. And also, it is not about putting things or money or assets in a trust is not only about inheritance tax; it is also about the transition of wealth and also trying to avoid litigation or just making it easier. So, you will have trust, people will have financial assets. You will have real estate. I have seen less real estate in trust because of the stamp duty charges, but it depends on the quantum, it is growing.

Ruchi Jain

When we are holding an existing asset and transferring to the trust, stamp duty considerations are very important. But when you are buying new, then you might just look at the trust structure. Yesterday, I was speaking to somebody who is buying two residential houses in different societies for their children. And their question was: should I buy in my LLP? If you want to exercise control during the lifetime of that asset and still want to give that asset to your children, then trust might be the right answer for that.

Surabhi Marwah

Amit, we spoke about IRR and return and not looking at the absolute value of the asset. How do you steer a conversation from owning more real estate to owning better real estate? Because at the end of the day, as a businessman, you also want to make that sale. At the end of the day, we are all here to do business. But you also want to make clients that are your clients for life. I have seen you do that very well. So, how do you steer them?

Amit Goyal

I was into private banking before setting up Sotheby's 10 years ago. It was always about advising clients on the strategy first and advising them right. It is about relationships and keeping your clients with you for long, just like you do. So, in my organization, the culture that we built is not about selling or pushing a product; it is all about looking at the client’s portfolio and giving him the right advice on how we can make unproductive assets productive, how we can create better IRR, better performance of the portfolio and also maintain some liquidity because that is what you know is required, at times. To answer your question, it is not about owning more and having quantity; it is all about having quality. Quality gives you better appreciation, more liquidity, and also a sense of ownership that you own good assets. As I mentioned earlier, there was a survey and 53% of the respondents wanted to consolidate. So, people are consolidating and then families want to own a lesser number of assets but better quality. It is all about them asking – do I want to own this asset just because my friend is buying? Does it make sense to buy in my portfolio? Does justice in the overall strategy of my portfolio?

Surabhi Marwah

That is where you come in and advise them and say, not this asset, but look at this. You are moving from selling individual assets to selling a strategy. I think that is how the business is always. You gave me a hook-on liquidity. Ruchi, liquidity is very big and as Indians, we use this word a lot – liquid asset. Now, when individuals or families or family offices are looking to seek liquidity from their real estate portfolio assets and they have a lot of options, we always tell them there is a tax consideration. It could be an outright sale, redevelopment and joint development arrangements. You could have REITs for monetization. You have institutional platforms before they come to you, and they come to EY and Amit for the commercial part of it. What are a few things you would want to point out and tell them?

Ruchi Jain

From the monetization or liquidity point of view, it is really important to assess each real estate class - like plots, which are suitable for, collaboration or an outright sale or if it is a commercial property more suitable or better monetization through the REIT model, or you just hold the commercial property and utilize and enjoy those rental yields.

The first part is that analysis one has to do. Second is consideration. Let us say a family office is holding plots of land parcels and wants to optimize through collaboration because that is how they will get better value rather than an outright sale. But then it is very important to see what my tax on the outright sale versus my collaboration will be including GST consideration. Most importantly, Real Estate Regulatory Authority (RERA) considerations in the residential market. If I am going for a collaboration under RERA, whether I become a promoter and whether I want to take those onerous points or the obligations which come on the promoter, and we can still structure the arrangement in a manner where it is a collaboration, but you structure it in a manner where you are not becoming a promoter. So, then the structuring consideration becomes important and how you plan that deal monetization strategy. So, these are some of the important aspects you look at from a direct tax point of view and the GST point of view. From a regulatory standpoint, while looking at the model.

Surabhi Marwah

It is not only at the time of buying; it is the liquidity angle. It is not just going out and doing an outright sale. Here, we are not talking about one house or one flat; we are talking about a portfolio and redesigning the strategy. So, a part of the redesigning of the strategy is the asset, is also the tax considerations and what to do with the asset and how to monetize it.

Ruchi

Another important point is how are you going to utilize that money, which you are getting and where do you need it. The capital gain planning and the further utilization of it. Surabhi: Amit, I am going to move away from brick-and-mortar real estate. How do families make use of these underutilized concepts or tools like REITs (real estate investment trusts) and (AIFs) Alternative Investment Funds? Do you see these vehicles as part of your strategy going forward?

Amit Goyal

Absolutely. This is something that is highly prevalent in developed markets. And it is growing in India. We have seen the numbers grow. More than INR2 lakh crore is already sitting in REITs, AIFs and Investment Trusts (InvITs). REITs offer you liquidity. It offers you regular cash flows, which is what most people like. There is of scale when it comes to any of these instruments. I would say this is not something that is a substitute for owning physical real estate. This is a complementary strategy that you have both in your portfolio: some physical assets and some through these. They also give you far more liquidity because you know the tenor, whether it is five, six or seven years. After that five or six-year period, you have those cash flows coming into your bank account. Family offices that have been considering and actively investing in InvITs and REITs are very sharp. They do their homework well; it is not about going after products or themes. They first and foremost choose the fund manager, which is the team that is going to manage that part of the money. When they create economy of scale and choose the right kind of developers, invest in projects, which gives them anywhere between 18% to 20% or 24% IRR per annum with the increased liquidity, this trend is going to continue and grow more and more.

Surabhi Marwah

Absolutely agree with you. Last question to you before I come to the rapid fire. You have been a friend to the first gen and then you are a mentor to the new generation or the next gen. How has the strategy changed for them?

Amit Goyal

The new generation or Gen Z, is far more analytical. A lot of them have studied overseas, stayed overseas and seen different markets. They grew up in different geographies. First, they want to have the strategy and then follow that strategy. Second, they are focused about what sits in the family as end use and what is investment. For those investments, there is less emotion, more strategy and more wisdom going into play. Third, liquidity plays a role. They are keeping that factor in mind. Fourth, the next gen is also much aware of wellness and longevity. So, they are looking at homes that are far more sustainable. They have wellness spaces in the homes and properties. So, this is an interesting trend that we are seeing more and more. They are going for larger spaces. They are going for the lifestyle.

Surabhi Marwah

Well, there was this concept earlier: if you have wealth, do not show it off. Live under the radar. This generation is saying we have earned our wealth in the right way, and life is short, and we want to make use of the wealth, and we want to really enhance our lifestyle. It is not just traveling first-class or other things; it is about how you live every day. There is so much to talk about global assets and diversification; they are much more open to them.

Amit Goyal

Some of them, yes, because as I said, they have lived abroad. They understand the culture; they understand languages; they have friends and family. But owning assets overseas is also not easy. You would know it more. This is Ruchi’s and your domain; because of LRS, you cannot buy large property. So many of them are restricted because of those regulations. But yes, some people do; whoever has family members and businesses overseas, they definitely buy.

Surabhi Marwah

Ruchi, last question to you. We talked about the next gen. Whenever we talk about generations, the typical questions are governance, succession and everything. You spoke about the fact that how you purchase a real estate asset and how you sell it depends upon the use because of succession planning, etc. As a last word, and before my rapid fire section, what would you like to say to families about this?

Ruchi Jain

It is important, Surabhi. When families are looking at a real estate portfolio, while some assets might be for just investment, monetization, but if it is a large portfolio plan for the generation, then the right governance structure, right succession structure is very important. It is important to document how you are going to manage those assets, who will take the decisions, and have a charter and define a proper structure to plan monetization and the continuity of the real estate portfolio for the next generation.

Surabhi Marwah

So, whenever someone is looking at buying or doing an overhaul of their strategy, succession plays a big role in that, because the trigger for people coming to you, Amit, is: am I getting the returns? I do not know what is going to happen, and today I may have buying, or my dad has been buying or my mom has been buying, but the next generation may not even know where those land parcels are. A lot of parents say, “I want to clean up everything for the next generation”. That is also succession, because one part of succession is putting it on paper and seeing how you are dividing, whether through a trust; the other part of succession is letting them know where the assets sit, making sure that the unproductive assets do not keep passing on, because then one day somebody may not even have count of them. I think succession plays a very big role and, in my mind, is the trigger often for many of these conversations that come up. So, it is a very big part and parcel of the entire conversation with you.

Ruchi Jain

I am dealing with a case where they were like some list of properties which had been passed on, and because there was no proper succession in place. So, there are multiple heirs. Now, we are getting into the relinquishment deed, transfer deed and selling of the asset is difficult because the succession was not there.

Amit Goyal

In some cases, the next gen does not want to go and visit all the properties which are scattered here and there, especially in Tier-II, III and IV towns. They do not understand; it is not how they have grown up or raised that they that they have the temperament or the wherewithal. Quite frequently we hear from clients, the old gen, that they want to consolidate and simplify things because they feel the next gen will not be able to manage all assets, or monetize, or make sense of them.

Surabhi Marwah

It is a key trigger. I think for all the people listening to this podcast; it is not only about buying; it is also about how to buy, where to buy, what to do with all the portfolio you have. If you do not know where that portfolio is, you have the stalwarts sitting here to tell you where it is, what to do with it and also how to make use of all of our tax breaks and benefits so that it is structured very well. So, I want to leave the audience with the top two or three things that they would remember from this podcast and should come back to you for.

Amit Goyal

Do not get emotionally attached. Own what you feel should sit in your portfolio. Secondly, keep liquidity in mind. Third would be concentration. The concentration risk is a big risk. So, one should follow the strategy. When you want to revisit the strategy, one can always revisit in six months, a year and every three years that what should be the strategy, but then follow it.

Surabhi Marwah

Absolutely. Thank you so much. One should not get emotional in any aspect of life. Ruchi, over to you.

Ruchi Jain

My top three things will be:

Plan in advance. Do not wait when you are holding and then looking for sale. Start your planning much before you even buy and then continue to relook at your strategy every three to five years, at least from a structure standpoint.
When you are planning the structure, please consult the right expert to create or advise you on the right tax, regulatory aspect and considerations.
Have a proper governance and succession plan in place for passing on the real estate assets to the next generation.

Surabhi Marwah

I will end by saying that the right people to consult are sitting here. Thank you so much for all the information. Amit, I will talk to you separately after looking at what to buy. The good asset, which is liquid and also not emotional at all. Thank you so much for listening in and have a great day.

Host

Surabhi Marwah, Partner and Leader, Family Office Advisory Services, EY India

Surabhi Marwah
Partner and Leader, Family Office Advisory Services, EY India

Speakers

Amit Goyal, Managing Director at India Sotheby’s International Realty

Amit Goyal
Managing Director, India Sotheby’s International Realty

Ruchi Jain, Partner, Tax, EY India

Ruchi Jain
Partner, Tax, EY India

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Episode 02

Duration

32m 31s

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