India's REIT Market Set to Soar to $25 Billion in Four Years
The Indian real estate investment trust (REIT) market, currently valued at around $18 billion, is projected to reach $25 billion in the next four years, marking a 38% surge, according to a new report.
ReitReal EstateMarket GrowthIndiaInvestmentReal Estate NewsSep 12, 2025
Three more REITs are expected to join the market over the next four years, further boosting the sector's growth. The report highlights several key factors driving this growth, including attractive yields of 6-7%, rental escalations, and capital appreciation opportunities.
Attractive yields and growth potential are making Indian REITs highly competitive compared to their global peers. Shobhit Agarwal, CEO of Anarock Capital, noted, “Indian REITs are late to the party, but now lead the dance. Despite its late entry compared to global peers, India has strong fundamentals. The distribution yields, currently averaging at 6-7%, are well above many mature markets such as the US and Singapore.”
Average distribution yields of Indian REITs are not only competitive with fixed-income instruments but also offer the added potential for capital appreciation. This makes them an attractive investment option for both domestic and international investors.
Despite the introduction of REIT guidelines in 2014 and the first listing in 2019, the Indian REIT market currently accounts for only 20% of institutional real estate. This is significantly lower compared to mature markets like the US (96%), Singapore (55%), and Japan (51%). The limited penetration is primarily due to the concentration of Indian REITs in 'Grade A' commercial office assets, which offer scale, transparency, and stable cash flows.
As the market matures, diversification is expected to expand into new asset classes, including data centers, logistics, and retail malls. The rising demand for digital infrastructure and e-commerce growth is expected to drive the expansion of data center and logistics REITs. Retail mall REITs may also emerge as the market consolidates.
With more asset classes becoming eligible for REITs, India’s penetration could rise to 25-30% of institutional real estate by 2030, positioning it as one of the fastest-growing REIT markets globally. Shekhar Patel, President of CREDAI, emphasized, “Over 60% of India’s REIT market value today rests with a very small set of players, primarily in Grade A offices linked to IT and BFSI. The future, however, holds far wider promise. As India’s cities grow, infrastructure strengthens, and the economy diversifies, REITs will expand into retail, logistics, housing, and new-age assets.”
Globally, industrial REITs are gaining significant momentum, driven by sustained e-commerce penetration, supply chain re-optimization, and last-mile logistics demand. Data center REITs, valued at $250 billion by 2024 and projected to double within seven years, are expanding rapidly due to surging cloud adoption, AI-driven workloads, and hyperscale infrastructure needs.
India is well-positioned to mirror this trend, as evidenced by a 60% year-on-year surge in industrial and logistics leasing in the first half of 2025, a 30% YoY rise in warehousing absorption, and a threefold increase in institutional investment to $2.5 billion in 2024. These factors are expected to further fuel the growth of the Indian REIT market in the coming years.
Frequently Asked Questions
What is the current market capitalization of the Indian REIT market?
The current market capitalization of the Indian REIT market is about $18 billion.
What is the projected market capitalization of the Indian REIT market in the next four years?
The Indian REIT market is projected to reach $25 billion in the next four years.
What are the key factors driving the growth of the Indian REIT market?
The key factors driving the growth of the Indian REIT market include attractive yields of 6-7%, rental escalations, and capital appreciation opportunities.
What is the current penetration of REITs in India's institutional real estate market?
The current penetration of REITs in India's institutional real estate market is 20%.
What new asset classes are expected to join the Indian REIT market?
New asset classes expected to join the Indian REIT market include data centers, logistics, and retail malls.
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