Summary of this article
REITs have widened access to stable, income-generating commercial properties
Large unlisted office stock offers strong scope for REIT expansion, says report
Diversification beyond offices may drive next phase of REIT growth
India’s commercial real estate market has changed significantly since the introduction of Real Estate Investment Trusts (REITs). REITs have significantly opened up property investing to a much wider pool of investors. According to the report titled, ‘Workplaces 2025: India Commercial Real Estate Reimagined’ by FICCI-ANAROCK, REITs have helped move the sector from fragmented ownership towards a more institutional, transparent, and income-oriented structure.
India entered the REIT space later than many global markets, with the first listing taking place in 2019. Yet, in just a few years, five REITs have listed and helped build a market capitalisation of nearly $18 billion. These trusts have improved transparency and liquidity while offering investors access to stable, income-generating commercial assets that were once largely the preserve of institutions, says the report.
REITs- in India have been instrumental in democratising real estate investments. The maturing public markets platform and the rising participation of large real estate players have enabled the institutionalisation of the sector. In India REIT stock accounts for only 20 per cent of the nation’s institutional real estate, according to the report. However, this is much lower than the other major economies worldwide. Thus, providing a broad and deep opportunity for institutional real estate assets.
“REITs in India are at a nascent stage with a combined portfolio of 165 million square feet out of 520 million square feet of stock that is worthy of being added. Thus, we may witness an accelerated transformation from fragmented and individual ownership to institutional assets with transparent governance and regular distribution of cashflows,” says Anuj Puri, Chairman ANAROCK Group.
Unlike global REIT markets that are spread across retail, industrial, logistics, and niche segments such as data centres, Indian REITs remain largely focused on office assets. This focus is backed by strong demand for Grade-A offices, stable lease structures, reliable tenants, and steady yields, led primarily by the IT-ITeS sector. This gap, as per the report, is an opportunity to expand.
Of the 520 million square feet of REIT-worthy office stock across India’s top seven cities, only around 165 million square feet (around 32 per cent) is currently listed under the four active REITs which include Embassy Office Parks, Mindspace Business Parks, Brookfield India, and Nexus Select Trust.
Southern cities such as Bengaluru, Hyderabad, and Chennai together account for nearly 313 million square feet of this potential stock, with just 31 per cent listed so far, notes the report.
With growing institutional participation and broader asset inclusion, the FICCI-ANAROCK Report projects India’s REIT penetration to rise to 25 to 30 per cent by 2030, placing it among the fastest-growing REIT markets globally, according to the report.
