India's Small and Medium REITs Market Set to Exceed $60 Billion by 2026
The potential Small and Medium Real Estate Investment Trusts (SM REITs) market size in India is expected to exceed $60 billion by 2026, with over 300 million sq. ft. of completed commercial office space.
Sm ReitsIndian Real EstateCommercial Office SpaceReitsInvestmentReal Estate NewsSep 05, 2024
The forecast reflects a growing interest in SM REITs, which are expected to play a key role in shaping the future of India's commercial real estate landscape. The total completed office stock in India currently stands at over 800 million sq. ft., out of which REIT-listed office inventory is recorded at over 88 million sq. ft.
Furthermore, according to the report, Mumbai recorded the highest potential SM REIT-ready completed office stock of ~75 million sq. ft. as of June 2024, with around 10+ million sq. ft. of upcoming supply by 2026. Delhi-NCR recorded a completed SM REIT-ready potential stock of 70+ million sq. ft., followed by Bengaluru with 50+ million sq. ft. and Hyderabad with 30+ million sq. ft.
The introduction of the SM REITs framework represents a significant step forward for India's fractional ownership landscape. This framework is expected to institutionalise the real estate market by fostering greater transparency and attracting a new set of investors seeking portfolio diversification through real estate exposure.
Building upon the success of traditional REITs and InvITs, which, according to the Reserve Bank of India, have cumulatively accumulated INR 1.3 trillion in asset value in the past four years, SM REITs hold immense promise. They offer the potential to unlock price discovery and exit opportunities for investors in smaller, high-occupancy assets.
Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, said, “The introduction of the SM REITs framework marks a pivotal moment for India’s commercial real estate sector. By enhancing transparency and offering robust investor protections, SM REITs are set to redefine portfolio diversification.
Rami Kaushal, Managing Director, Consulting & Valuation Services, India, Middle East & Africa, CBRE, said, “The alignment of SM REITs with recent tax reforms under the Union Budget 2024-25 is a game-changer for the investment landscape.
Frequently Asked Questions
What is the expected market size of SM REITs in India by 2026?
$60 billion
How much commercial office space is expected to be completed by 2026?
50 million sq. ft.
Which city has the highest potential SM REIT-ready completed office stock?
Mumbai
What is the main benefit of the SM REITs framework?
It is expected to institutionalise the real estate market by fostering greater transparency and attracting a new set of investors.
How do SM REITs offer exit opportunities for investors?
They offer the potential to unlock price discovery and exit opportunities for investors in smaller, high-occupancy assets.
Related News Articles
Long-Term Capital Gain Tax Reforms: A Boon for Real Estate Investors
The revised long-term capital gain tax is expected to benefit most real estate investors, with returns exceeding 10-11 per cent, according to Revenue Secretary.
Hyderabad's Luxury Real Estate Market Sees Sharp Rise in Demand
The city's residential market has dramatically transformed, establishing itself as one of India's most dynamic and sought-after real estate destinations.
Brigade Enterprises Raises ₹1,500 Crore via QIP, Shares Allotted to Goldman Sachs, Smallcap World Fund
Bengaluru-based real estate developer Brigade Enterprises Ltd. has successfully raised ₹1,500 crore through its Qualified Institutional Placement (QIP).
Is the Commercial Realty Boom in India a Sustainable Trend or a Bubble Ready to Burst?
Lately, you may have observed large tracts of land being excavated and developed in major Indian real estate markets, especially in metropolitan cities like Mumbai, Delhi, and Bengaluru. This article delves into whether this real estate boom is a sustaina
Nariman Point: A New Lease of Life for Mumbai's Historic CBD
Nariman Point, once the heart of Mumbai’s business landscape, is experiencing a renaissance. With new companies, law firms, and international consulates setting up offices, lease rentals are on the rise, signaling a promising future for this iconic area.
Fadnavis' Vision for Mumbai: A Blueprint for Economic Growth
Mohandas Pai, the renowned Indian venture capitalist and entrepreneur, has praised the economic policies of Maharashtra, particularly those implemented by Deputy Chief Minister Devendra Fadnavis. Pai believes that Karnataka's leaders should study and adop