Indian REITs Offer Stable 12-14% Returns as Real Estate Market Thrives
Experts at the CNBC-TV18 Global Leadership Summit (GLS) 2025 highlight the strong performance of Indian REITs, delivering 12-14% annual returns. They emphasize the long-term potential of the residential market and the resilience of the commercial real estate sector.
ReitsReal EstateInvestmentReturnsCommercial PropertyReal Estate NewsNov 07, 2025
At the CNBC-TV18 Global Leadership Summit (GLS) 2025, industry experts noted that Indian REITs are generating annualized returns of 12-14%, making them an attractive alternative to traditional equity or debt investments.
“REITs are truly a game changer,” said Aditya Virwani, Managing Director of Embassy Group. “They provide access to Grade A office assets for retail investors at ticket sizes as low as ₹300. It’s a low-risk, medium-return product — you’re looking at 12-14%, which is very stable compared to the volatility of equities.”
Commercial Real Estate Resilience Fuels REIT Appeal
Experts agreed that India’s commercial real estate sector remains resilient, with Grade A office absorption exceeding 90% of total demand. The country’s position as a global capability center (GCC) hub continues to drive leasing activity, particularly in cities like Bengaluru and Hyderabad.
Despite concerns about geopolitical risks and AI-driven workforce shifts, Virwani remained optimistic. “India will come out strong from the AI revolution. The work will change, but the service sector will keep growing,” he said.
Residential Market Steady
On the residential front, panelists dismissed fears of overheating in the luxury segment, even as inventory levels in the ₹20–50 million and ₹200–500 million categories have risen sharply. They cited evolving lifestyle aspirations, independent-living preferences among younger buyers, and long-term capital appreciation as key drivers of demand.
“The residential market should always be viewed with a 7-10 year horizon,” one expert noted, adding that housing returns typically trail equities but outperform debt.
Institutional Capital Deepens Play
Looking ahead, panelists highlighted the growing role of Infrastructure Investment Trusts (InvITs) and institutional capital in financing infrastructure assets. With REITs now classified under the equity category for mutual funds, they expect greater investor participation and liquidity.
For the next phase of growth, experts urged reforms to simplify approval processes and digitize land records. “If these two steps are achieved,” said Sriram Khattar, “India’s real estate sector is poised for a long, sustainable run.”
As equity markets consolidate and fixed-income yields remain moderate, REITs — offering steady 12-14% returns and exposure to high-quality assets — are emerging as India’s most attractive bridge between stability and growth.
Investor performance has been strong. Mindspace REIT delivered a 36% total return in the past year, 27% annualized over two years, and 15.8% since listing five years ago.
The investor base has grown from a few thousand in 2019 to about 3 lakh as of September 2024, with mutual funds investing nearly ₹30,000 crore and insurance firms around ₹10,000 crore.
As of December 2024, major Indian REITs — Embassy REIT, Mindspace REIT, Brookfield India REIT, and Nexus Select Trust REIT — have provided cumulative returns ranging from 6% to 39% since inception.
Frequently Asked Questions
What are the average returns from Indian REITs?
Indian REITs are currently delivering annualized returns of 12-14%, making them a compelling alternative to traditional equity or debt instruments.
How resilient is India's commercial real estate sector?
India’s commercial real estate sector remains resilient, with Grade A office absorption exceeding 90% of total demand. The country’s position as a global capability center (GCC) hub continues to drive leasing activity, particularly in cities like Bengaluru and Hyderabad.
What drives demand in the residential real estate market?
Evolving lifestyle aspirations, independent-living preferences among younger buyers, and long-term capital appreciation are key drivers of demand in the residential real estate market.
What reforms are needed for the future growth of the real estate sector?
Experts urge reforms to simplify approval processes and digitize land records. These steps are expected to position India’s real estate sector for a long, sustainable run.
How has investor participation in REITs grown?
The investor base for REITs has grown from a few thousand in 2019 to about 3 lakh as of September 2024, with mutual funds investing nearly ₹30,000 crore and insurance firms around ₹10,000 crore.
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