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Table of Content
- How India’s REIT Market Compares with Global Peers
- Growth Trajectory of India’s REITs
- Office Assets Continue to Anchor India’s REITs
- Retail REITs: Slow Today, Strong Tomorrow
- Why Residential REITs Remain a Long-Term Prospect
- New Asset Classes That Could Drive the Next REIT Cycle
- What This Means for Investors and Policymakers
- Conclusion
India’s REITs account for only 19% of the country’s listed real estate value, far below the global average of 57%, pointing to significant long-term growth potential. With market capitalisation expected to rise from $18 billion in 2025 to $25 billion by 2030, expanding office assets and emerging retail and alternative sectors are set to drive the next phase of REIT market development in India.
According to a recent industry report, India’s REIT market is transitioning from an early-stage ecosystem to a more structured investment platform, supported by rising commercial assets, policy stability, and expanding investor awareness.
How India’s REIT Market Compares with Global Peers
India vs Global REIT Penetration
India’s REITs currently represent just 19% of listed real estate value and around 0.4% of total stock market capitalisation. In contrast, globally mature markets average nearly 57%, with some countries crossing 90% penetration.
This wide disparity does not reflect a lack of demand, but rather the early stage of India’s REIT evolution.
Also Read: India’s Real Estate Sector Raises Rs 17,867 Crore via Capital Markets in FY26 YTD
Mature REIT Markets Explained
In countries such as the United States, Australia, Singapore, Japan, and the UK, REIT platforms span multiple asset classes, including:
- Residential housing
- Healthcare facilities
- Logistics and warehousing
- Data centres
- Self-storage and industrial parks
In the US and Australia, more than 95% of investable real estate is listed through REITs, providing liquidity, transparency, and diversified income streams—an ecosystem India is only beginning to build.
Growth Trajectory of India’s REITs
Market Capitalisation Outlook
India’s REIT market capitalisation is projected to grow from approximately $18 billion in 2025 to $25 billion by 2030, driven by:
- Doubling of REIT-able office assets
- Gradual inclusion of retail and alternative assets
- Increasing participation from domestic and global investors
REIT-ready assets are expected to expand significantly as developers seek capital recycling and balance-sheet efficiency.
Why India’s REIT Market Is Still Young
Although REIT regulations were introduced in 2014, India’s first REIT listing occurred only in 2019. Over the past six years, India’s REITs have grown rapidly but remain constrained by:
- Limited stabilised, income-generating assets
- Fragmented asset ownership
- High proportion of under-construction stock
Despite these constraints, India’s REIT ecosystem expanded from ₹264 billion in FY20 to nearly ₹1.6 trillion by FY26, reflecting strong underlying demand.
Office Assets Continue to Anchor India’s REITs
Why Offices Dominate India’s REITs
Office assets form the backbone of India’s REITs, accounting for the majority of listed portfolios. Key drivers include:
- Strong leasing demand from GCCs
- Presence of global technology and BFSI firms
- Predictable cash flows and yields of 5–7%
Currently, listed office REITs collectively manage over 135 million sq ft of commercial space across major Indian cities.
Upcoming Office REIT Listings
India has over 1 billion sq ft of office stock, with nearly 500 million sq ft considered REIT-worthy. Developers are increasingly preparing to monetise these assets.
Several large portfolios are expected to enter the market over the next few years, potentially deepening liquidity and expanding India’s REIT investor base.
Retail REITs: Slow Today, Strong Tomorrow
Why Retail REIT Growth Has Been Limited
Retail REITs in India have grown at a slower pace due to:
- Dependence on footfall and consumption cycles
- Complex tenant management
- Longer stabilisation periods
At present, India has only one listed retail REIT despite having nearly 89 million sq ft of Grade A mall stock.
Retail REIT Opportunity by 2030
Only about 10.6 million sq ft of mall space is currently under REITs, leaving a substantial institutional opportunity. Industry estimates suggest:
- Retail REIT-ready assets could grow from ₹1.5 trillion in 2025 to ₹2.4 trillion by 2030
- Two to three new retail REIT listings may emerge over the next five years
- Market size could reach $6–9 billion by 2030
Emerging cities such as Indore, Surat, Coimbatore, Bhubaneswar, and Chandigarh are expected to play a key role in this expansion.
Why Residential REITs Remain a Long-Term Prospect
Structural Challenges in Residential Assets
Despite strong housing demand, residential assets face multiple barriers to REIT inclusion:
- Low rental yields of 2–3%
- High tenant churn
- Fragmented ownership structures
- Lack of large institutional rental portfolios
India also lacks a unified national rental housing policy, a key enabler in global residential REIT markets.
Emerging Alternatives Within Residential Formats
While traditional residential REITs remain challenging, emerging formats could gradually improve viability:
- Co-living and managed rental housing
- Student accommodation
- Senior living communities
- SM-REITs aggregating smaller assets
These models may help broaden India’s REIT ecosystem over the long term.
Also Read: Indian Real Estate Sees 16% Dip in Foreign Investment at $3.65 Billion
New Asset Classes That Could Drive the Next REIT Cycle
Beyond offices and retail, India’s REITs could expand into alternative asset classes aligned with global trends:
- Data centres supporting digital infrastructure
- Warehousing and logistics driven by e-commerce
- Industrial parks linked to manufacturing growth
These segments offer scalable, yield-bearing opportunities and could significantly deepen India’s REIT platform.
What This Means for Investors and Policymakers
For investors, the low penetration of India’s REITs represents a structural opportunity for long-term capital appreciation and stable income. For policymakers, the focus remains on:
- Encouraging asset formalisation
- Strengthening REIT-friendly regulations
- Supporting diversified listings
Greater policy coherence and market depth could accelerate India’s transition toward a mature REIT ecosystem.
Conclusion
India’s REITs currently account for a small share of listed real estate compared to global peers, but this under-penetration highlights immense growth potential rather than a structural weakness. As office assets scale further and new asset classes enter the fold, India’s REIT market is well-positioned to evolve into one of the most dynamic investment platforms globally over the next decade.
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Ans 1. India’s REITs currently account for about 19% of listed real estate value, which is significantly lower than the global average of nearly 57%. This gap reflects the early stage of India’s REIT market rather than weak demand, highlighting strong long-term growth potential.
Ans 2. India’s REIT market is relatively young, with the first listing only in 2019. Limited availability of stabilised income-generating assets, fragmented ownership, and a high share of under-construction properties have slowed REIT penetration compared to mature markets like the US, Singapore, and Australia.
Ans 3. India’s REIT market capitalisation is projected to grow from around $18 billion in 2025 to nearly $25 billion by 2030. This growth is expected to be driven by expanding office portfolios, selective retail listings, and the gradual inclusion of alternative asset classes.
Ans 4. Office assets dominate Indian REITs because they offer predictable rental income, stable occupancy, and yields of around 5–7%. Strong demand from global capability centres, IT firms, and BFSI companies has made offices the most REIT-ready asset class in India.
Ans 5. Yes, retail REITs are expected to grow gradually over the next five years. Although retail assets have longer stabilisation cycles, India has a large pipeline of Grade A malls, and industry estimates suggest two to three new retail REIT listings could emerge by 2030.
Ans 6. Residential assets face structural challenges such as low rental yields, high tenant churn, fragmented ownership, and the absence of large institutional rental portfolios. These factors make residential REITs difficult to scale in India at present.
Ans 7. Alternative assets such as data centres, warehousing, logistics parks, and industrial estates are emerging as strong candidates for future REIT listings. These assets align with India’s digital, manufacturing, and e-commerce growth and offer scalable, yield-generating opportunities.
Ans 8. Low REIT penetration represents a structural opportunity for investors rather than a risk. As India formalises more commercial real estate and diversifies asset classes, REITs could offer long-term capital appreciation along with stable income streams.
Ans 9. Clearer regulations, encouragement of asset formalisation, support for diversified REIT listings, and stable taxation policies can help India transition toward a more mature REIT ecosystem, closer to global benchmarks.