India's REIT Market: Early Stages with Huge Growth Potential

New Delhi, 10th Jan 2026 – India’s Real Estate Investment Trust (REIT) market remains at a nascent stage, with REITs accounting for only 19% of the country’s listed real estate value, compared to a global average of 57%. While this gap highlights India’s relative under-penetration, it also signals substantial headroom for long-term growth as the market matures and diversifies, according to Vestian Research.

India currently has five listed REITs—four focused on office assets and one in the retail segment. The dominance of office REITs reflects the early stage of the ecosystem, as most other real estate asset classes are yet to achieve the scale, maturity, and institutional structure required for public REIT listings.

Global REIT Landscape: A Sharp Contrast

Globally, REIT ecosystems are far more diversified. Markets such as the United States, Australia, Singapore, Japan, and the UK host multiple REIT categories spanning residential, healthcare, logistics, self-storage, data centres, and mortgage-backed platforms. In countries like the US and Australia, over 95% of listed real estate value is held within REITs, underscoring the maturity and depth of these markets.

In comparison, India’s REIT market cap represents just 0.4% of the total stock market, reinforcing its early-stage position but also highlighting the scale of untapped opportunity.

| Country | Year of REITs Introduction | Total No. of Listed REITs | REIT Market Cap as % of Total Listed Real Estate | REIT Market Cap as % of Total Stock Market | |---------|---------------------------|---------------------------|-------------------------------------------------|------------------------------------------| | USA | 1960 | 225 | 98.3 | 1.8 | | Australia | 1971 | 50 | 95.3 | 6.7 | | UK | 2007 | 45 | 93.5 | 1.9 | | Singapore | 2002 | 40 | 67.4 | 14.0 | | Japan | 2001 | 58 | 44.9 | 1.5 | | Malaysia | 1989 | 20 | 28.6 | 2.9 | | India | 2019 | 5 | 19.0 | 0.4 |

Note: Data as of Q3 2025 Source: Compiled by Vestian Research

India’s REIT Ecosystem: Early but Expanding

Although REIT regulations were notified in 2014, India’s first REIT listing came only in 2019. Over the past six years, the sector has grown rapidly, expanding from INR 264 billion in FY20 to INR 1.6 trillion by Q2 FY26. However, the availability of stabilised, income-generating assets remains limited, as a large portion of commercial stock is either under construction or held in fragmented ownership structures.

Office Sector: The Backbone of Indian REITs

Office assets continue to anchor India’s REIT market, with listed portfolios spanning over 135 million sq ft. These assets benefit from predictable leasing demand from Global Capability Centres (GCCs), technology firms, and BFSI occupiers, supporting stable yields of 5–7%.

India has over 1 billion sq ft of office stock, of which nearly 500 million sq ft is considered REIT-worthy. An additional 34 million sq ft is already part of existing REIT pipelines. Developers are increasingly preparing to monetise this potential. Notably, Bagmane Developers, backed by Blackstone, is expected to launch an INR 4,000 crore REIT IPO in early 2026, which could become the next major listing and further deepen institutional participation.

Retail REITs: A Largely Untapped Opportunity

Retail REITs have been slower to emerge due to the sector’s dependence on footfall dynamics, consumption trends, and long-term tenant management. Currently, Nexus Select Trust is India’s only retail REIT, despite the country having over 89 million sq ft of Grade A retail stock.

Only 10.6 million sq ft of Grade A mall space is presently under REITs, leaving an institutional opportunity nearly eight times larger. As consumption deepens and professionally managed malls mature, REIT-ready retail assets are projected to grow from INR 1.5 trillion in 2025 to INR 2.4 trillion by 2030. Industry estimates suggest two to three new retail REIT listings over the next three to five years, with the retail REIT market potentially reaching USD 6–9 billion by 2030. Emerging cities such as Indore, Coimbatore, Surat, Chandigarh, and Bhubaneswar are expected to play a key role in shaping this diversified pipeline.

Emerging Asset Classes: The Next Frontier

Beyond offices and retail, asset classes such as warehousing, industrial parks, logistics facilities, and data centres are poised to become the next growth drivers for India’s REIT market. Industrial and warehousing REIT/InvIT opportunities are estimated to expand from INR 0.7 trillion to INR 1.3 trillion by 2030, mirroring global trends where logistics and data centres form core REIT subsectors.

Shrinivas Rao, FRICS, CEO, Vestian said, “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 centres, logistics, industrial parks, and warehousing offer scalable, yield-bearing opportunities aligned with mature global REIT markets.”

Residential Assets: Potential, Not Yet Prepared

Residential real estate remains on the threshold of REIT inclusion but faces structural challenges. Low rental yields of 2–3%, fragmented ownership, high tenant churn, and the absence of large institutional rental portfolios continue to limit viability. Additionally, India lacks a unified rental housing policy, a critical enabler in mature REIT markets such as the US, Japan, and Singapore. While emerging formats like co-living, student housing, and senior living offer promise, residential REITs remain a longer-term prospect.

Rao added, “While residential REITs remain challenging due to low rental yields and policy constraints, innovation in rental formats could improve viability over time. SM-REITs can also play a key role by aggregating smaller, stabilised assets and broadening participation in India’s REIT ecosystem.”

Policy Support and SM-REITs

India’s regulatory framework is gradually evolving to support broader participation. The introduction of Small and Medium REITs (SM-REITs), allowing portfolios valued between INR 50–500 crore, marks a significant step towards democratising access. Structures such as PropShare Platina (2024) and PropShare Titania (2025) are already operational, with more expected as smaller commercial assets transition into formal, transparent vehicles.

Outlook

India’s REIT market is steadily progressing from infancy towards adolescence. Market capitalisation is projected to increase from USD 18 billion in 2025 to USD 25 billion by 2030. With the doubling of REIT-able office assets from INR 8.2 trillion in 2025 to INR 16 trillion by 2030, alongside the expansion of retail and alternative asset classes, India is well-positioned to emerge as one of the most dynamic REIT markets 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.