India’s REIT Market Overtakes Hong Kong at ₹2.3 Lakh Cr GAV

India’s REIT market has reached a defining milestone, crossing ₹2.3 lakh crore in gross asset value (GAV) and overtaking Hong Kong in overall market scale. In just six years since the country’s first REIT listing, India has emerged as one of Asia’s fastest-growing listed real estate investment destinations, reflecting rising investor confidence, strong leasing fundamentals, and improving regulatory clarity.

This rapid expansion positions India’s REIT market as a structural pillar of the country’s commercial real estate ecosystem rather than a niche income product. The milestone also highlights a broader shift in how domestic and global investors are accessing Indian real estate moving away from direct ownership toward transparent, yield-generating, and regulated platforms.

What ₹2.3 Lakh Crore GAV Really Means for India’s REIT Market

Gross asset value represents the total value of properties held by REIT platforms. With India’s REIT market now at approximately ₹2.3 lakh crore in GAV and an equity market capitalisation of around ₹1.66 lakh crore, the sector has surpassed Hong Kong’s REIT universe in size.

This achievement is particularly significant because India has achieved this scale with only five listed REITs, compared to much older and more saturated global markets. Analysts note that less than one-third of India’s REIT-ready office and retail stock has been monetised so far, indicating substantial room for future growth.

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Rapid Growth in Just Six Years

India’s REIT journey began in 2019 with the listing of Embassy Office Parks REIT. Since then, the sector has expanded rapidly with platforms such as Mindspace Business Parks REIT, Brookfield India REIT, Nexus Select Trust, and, most recently, Knowledge Realty Trust, now India’s largest office REIT by GAV and net operating income.

The pace at which India’s REIT market has scaled underscores the depth of institutional-grade commercial real estate in the country. Within six years, India has built a REIT ecosystem that rivals global peers in asset quality, transparency, and return metrics.

Portfolio Spread Across India’s Key Office and Retail Hubs

One of the defining strengths of India’s REIT market is geographic and sectoral diversification. REIT portfolios today span Bengaluru, NCR, Mumbai Metropolitan Region (MMR), Hyderabad, Pune, Chennai, and select Tier-II cities, offering exposure to India’s most active technology, financial services, consulting, and retail corridors.

This diversification reduces concentration risk while providing investors access to long-lease assets anchored by blue-chip tenants. From IT and BFSI occupiers to global consulting firms and organised retail brands, India’s REIT market benefits from a broad and resilient tenant base.

Strong Returns Drive Investor Interest

Indian REITs have delivered a compelling dual-return profile combining income stability with capital appreciation. Since listing, unit prices of the first four REITs have risen between 25% and 61%, while Knowledge Realty Trust has already recorded double-digit gains since its debut.

Over the past five years, India’s REIT market has delivered an annualised price return of nearly 9%, outperforming REIT peers in Singapore, Japan, and Hong Kong. This performance has strengthened investor perception of REITs as long-term wealth compounding instruments rather than mere yield plays.

Distribution Growth and Income Stability

Income generation remains a core attraction of India’s REIT market. In the second quarter of FY26 alone, listed REITs distributed over ₹2,331 crore, marking a nearly 70% year-on-year increase. This growth has been driven by higher occupancies, incremental asset additions, and the impact of new listings.

Distribution yields currently range between 5.1% and 6%, offering predictable cash flows in a market environment characterised by interest rate volatility. For income-focused investors, REIT distributions provide a stable alternative to fixed-income instruments with the added benefit of capital appreciation.

Operational Strength: High Occupancy and Rental Upside

Operational fundamentals across India’s REIT market remain robust. Committed occupancies range between 90% and 96%, reflecting strong tenant retention and sustained leasing demand across major office hubs.

Re-leasing spreads in the 20–36% range and a 15–24% mark-to-market upside on in-place rents provides clear visibility for net operating income growth over the next three to four years. These metrics underscore the resilience of India’s office market, even as global work patterns evolve toward hybrid models.

Balance Sheet Strength and Credit Quality

Another critical differentiator for India’s REIT market is financial discipline. All five listed REITs carry AAA credit ratings from CRISIL, supported by conservative leverage and strong cash flow coverage.

Loan-to-value ratios range between 18% and 31%, well below global thresholds, ensuring balance sheet flexibility and downside protection. This prudent capital structure enhances investor confidence and positions REITs to pursue growth without compromising financial stability.

Tax Efficiency: A Key Advantage of India’s REIT Market

Tax efficiency has played a major role in accelerating investor adoption. REIT distributions are structured as a combination of dividends, interest income, and return of capital, with over 65% of distributions currently tax-exempt in the hands of unitholders.

This structure significantly enhances post-tax returns, making India’s REIT market particularly attractive to high-net-worth individuals, family offices, and long-term institutional investors seeking efficient income streams.

Regulatory Tailwinds: SEBI’s Equity Reclassification

A major catalyst ahead is SEBI’s decision to reclassify REIT units as equity-related instruments from January 1, 2026. This move is expected to unlock index inclusion and allow mutual funds to raise allocations to REITs, potentially opening the door to a much broader domestic investor base.

Market participants believe this regulatory shift could accelerate capital inflows and push India’s REIT market beyond the $20 billion market capitalisation threshold in the near term.

Why India’s REIT Market Is Gaining Structural Importance

The rapid rise of India’s REIT market reflects a broader transformation in real estate investing. Investors are increasingly prioritising transparency, liquidity, governance, and predictable income features that REITs offer over traditional property ownership.

As institutional capital deepens its presence, REITs are evolving into core portfolio allocations rather than opportunistic bets, reinforcing their role in India’s financial and real estate architecture.

Headroom for Growth: What Lies Ahead

Despite its scale, India’s REIT market remains underpenetrated. With only a fraction of Grade A office and organised retail assets monetised, the pipeline for future listings remains strong.

Upcoming opportunities include additional office REITs, retail-focused platforms, and potentially mixed-use or infrastructure-linked REITs, which could further broaden the market and attract new investor segments.

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How India’s REIT Market Compares Globally

Compared to mature markets like Singapore and Japan, India’s REIT market stands out for its higher growth trajectory, competitive yields, and strong rental upside. While global peers benefit from stability, India combines stability with expansion, making it one of the most attractive REIT destinations in Asia.

The fact that India has overtaken Hong Kong in scale within such a short period underscores the country’s growing relevance in global real estate capital flows.

What This Means for Investors

For investors, India’s REIT market offers a rare blend of income stability, capital appreciation, regulatory oversight, and liquidity. With high-quality assets, blue-chip tenants, and improving policy support, REITs are increasingly suitable for both conservative and growth-oriented portfolios.

As domestic participation rises alongside global interest, REITs are expected to play a larger role in wealth creation and portfolio diversification.

Conclusion

Crossing ₹2.3 lakh crore in gross asset value marks more than a numerical milestone it signals the arrival of India’s REIT market as a mature, scalable, and globally competitive investment platform.

Backed by strong fundamentals, conservative leverage, regulatory tailwinds, and a deep pipeline of assets, India’s REIT market is well-positioned to enter its next phase of sustained growth, offering investors a compelling gateway into the country’s commercial real estate story.