Budget 2026: REITs Surge as FM Proposes Recycling CPSE Real Estate Assets

Real Estate Investment Trusts (REITs) such as Brookfield India Real Estate Trust, Nexus Select Trust, and Embassy Office Parks REIT gained up to 3% after Finance Minister Nirmala Sitharaman announced the creation of dedicated Real Estate Investment Trusts (REITs) for Central Public Sector Enterprises (CPSEs).

Brookfield India Real Estate Trust rose as much as 3% to their day’s high of Rs 361.99 on the NSE, while Nexus Select Trust climbed over 3% to Rs 159. Embassy Office Parks REIT shares were up 1% to Rs 440, while Mindspace Business Parks REIT traded flat, though the bias was negative.

During her Budget 2026 speech, Finance Minister Nirmala Sitharaman highlighted the government’s continued focus on developing infrastructure in cities with over 5 lakh population (Tier II and Tier III), which have expanded to become growth centers. She stated, “During this past decade, our Government has undertaken several initiatives for large-scale enhancement of public infrastructure, including through new financing instruments such as Infrastructure Investment Trusts (InVITs) and Real Estate Investment Trusts (REITs) and institutions like NIIF and NABFID. We shall continue to focus on developing infrastructure in cities with over 5 lakh population (Tier II and Tier III), which have expanded to become growth centres.”

Sitharaman further proposed to accelerate the recycling of significant real estate assets of CPSEs through the setting up of dedicated REITs. She emphasized that over the years, REITs have emerged as a successful instrument for asset monetization.

The Indian REITs Association welcomed the proposal, stating, “The proposal to monetize large, underutilized government-owned real estate through REIT structures is a strong signal of intent. It reflects a clear move from passive ownership to efficient, market-linked asset management, while unlocking long-term value from mature public assets and recycling capital into fresh infrastructure development.”

Experts also noted the broader implications of this move. “By positioning REITs as a key mechanism for asset monetization, the Budget reinforces their growing role in India’s infrastructure financing ecosystem. Dedicated CPSE REITs can accelerate capital recycling, improve balance-sheet efficiency for public enterprises, and expand access to high-quality, income-generating assets for a wider investor base through transparent and regulated instruments,” said an industry analyst.

The Budget’s continued emphasis on infrastructure investment, with capital expenditure raised by 9% to Rs 12.2 lakh crore for FY27, further strengthens the backdrop for REITs and InvITs. The sustained focus on urban centers, including cities with populations above five lakh, opens new opportunities for commercial, transport, and public infrastructure assets across both established and emerging markets.

Apurva Muthalia, Business Head – Real Estate at Equirus Family Offices, commented that the creation of REITs for PSU-owned real estate assets can be a structural positive for both the public sector and capital markets. “It enables PSUs to free up capital from their balance sheets while retaining operational control over strategic assets. At the same time, it deepens the REIT market by offering investors access to stabilized, income-generating assets leased to quasi-sovereign entities. This creates a strong proposition for retail investors, asset managers, and institutional investors, while unlocking value for PSUs that own multiple commercial office properties,” Muthalia said.

The move is expected to enhance the liquidity and depth of the REIT market, making it more attractive for a broader range of investors, including retail and institutional participants. It also aligns with the government’s broader vision of leveraging public assets to drive sustainable economic growth and development.