Two real estate stocks can do well amidst sector underperformance, CLSA says after Budget 2026

Global brokerage CLSA cited a constructive outlook for the real estate sector, pointing to the policy measures in the Budget that are expected to support long-term growth.

After naming DLF and Embassy REIT as its top sector picks, the brokerage said the government has proposed several positive steps, including greater clarity on taxes and compliance for global capability centres (GCCs), along with a tax holiday for foreign companies setting up data centres until 2047.

CLSA said that these benefits are partly offset by restrictions on the use of MAT credits.

However, the measures are seen as particularly relevant for property developers focused on building annuity assets and for those looking to monetise land parcels for data centre development.

While the limitation on MAT credits could weigh on earnings in the mid-term, CLSA believes the longer-term gains from the expansion of GCCs and data centres are likely to more than offset this impact, making the overall policy direction positive for the segment.