India Poised to Become a Global Leader in the Dynamic REIT Market
NEW DELHI, Jan 10: India is well positioned to become the most dynamic REIT (Real Estate Investment Trust) market globally, as developers look to monetize their rent-yielding commercial properties through this structure, according to Vestian, a US-based real estate consultant.
On Saturday, Vestian released a report highlighting the significant potential for growth in the Indian REIT market. The report emphasizes the availability of prime commercial assets, including office spaces, retail, warehousing, and data centers, which can be monetized through REITs.
Real Estate Investment Trusts (REITs) are investment vehicles that own or operate income-generating real estate, allowing investors to earn a share of the income produced without directly purchasing the properties. Currently, there are five listed REITs in India: Sattva Group and Blackstone-backed Knowledge Realty Trust (KRT), K Raheja Group-backed Mindspace Business Parks REIT, Brookfield India Real Estate Trust, Embassy Office Parks REIT, and Nexus Select Trust.
India’s REIT market is steadily progressing from its infancy towards adolescence. Market capitalization is projected to increase from USD 18 billion in 2025 to USD 25 billion by 2030, according to Vestian. The consultant notes that the doubling of REIT-able office assets, alongside the expansion of retail and alternative asset classes, positions India as a leading REIT market globally.
“The foundations are firmly in place. The next phase of growth will be driven by diversification, scale, and policy coherence, key catalysts that will transform India’s REIT platform into a broad, multi-sector investment universe,” the report stated.
Out of the five listed REITs, only Nexus Select Trust is backed by retail properties. The remaining four are office REITs. Shrinivas Rao, CEO of Vestian, commented, “India’s REIT market holds huge upside potential, given its low penetration and the need to move beyond offices and selective retail. As the market evolves, asset classes such as data centers, logistics, industrial parks, and warehousing offer scalable, yield-bearing opportunities aligned with mature global REIT markets.”
Office assets continue to anchor India’s REIT market. The listed portfolios span over 135 million square feet. These office assets benefit from predictable leasing demand from Global Capability Centres (GCCs), technology firms, and BFSI occupiers, supporting stable yields of 5-7 percent, according to Vestian.
India has over 1 billion square feet of office stock, of which nearly 500 million square feet is considered REIT-worthy. However, residential real estate remains on the threshold of REIT inclusion but faces structural challenges. Low rental yields of 2-3 percent, fragmented ownership, high tenant churn, and the absence of large institutional rental portfolios continue to limit viability.
Moreover, India does not have a unified rental housing policy. “While emerging formats like co-living, student housing, and senior living offer promise, residential REITs remain a longer-term prospect,” Vestian noted.
Recently, Bagmane Prime Office REIT, backed by Bengaluru-based realty firm Bagmane Group, has filed a draft paper with the market regulator to launch its Initial Public Offering (IPO) to raise up to Rs 4,000 crore. If successful, this will be the sixth listed REIT in India.
