REIT Penetration in India's Office Market Set to Double by 2030
India's Real Estate Investment Trust (REIT) market is rapidly advancing from a 'Nascent' to 'Early Growth' stage, with nearly 140 million sq ft of real estate assets, including office and retail spaces, already listed.
ReitOffice MarketReal EstateBengaluruHyderabadReal EstateAug 29, 2025
Additionally, about 371 million sq ft of office assets, accounting for about 46% of the existing Grade A stock, have the potential to come under future REITs. Among the top seven cities, Bengaluru leads with a 24% share of additional REITable stock, followed by Hyderabad at 19%. Existing REITs have around 34 million sq ft of under-construction supply, expected to become operational in the next 1-2 years. Overall, Indian REITs continue to gain momentum, particularly in the office sector, supported by new listings, a broadening occupier base, and growing institutionalization.
Interestingly, about 223 million sq ft or 60% of the additional REITable office stock lies within Secondary Business Districts (SBDs) of the top seven cities in India. Among these SBDs, Bengaluru leads with a 36% share, followed by Hyderabad at 29%. While the additional REITable stock is predominantly concentrated in SBDs and Peripheral Business Districts (PBDs) of major cities, about 14% of Grade A buildings in Central Business District (CBD) localities have the potential to be listed as future REITs.
Tenant quality is a crucial factor driving occupancy levels and average rentals of properties under REITs. Despite global uncertainties, office REITs continue to demonstrate strong operational performance. With occupancy rates exceeding 86%, demand for premium office spaces remains robust. Steady rental income growth, supported by long-term leases and high tenant retention, further enhances the credibility of REITs in the Indian office market.
“Office REITs in India are at an early growth stage, with approximately 16% of Grade A stock already listed on the equity markets. An additional 371 million sq ft of office space can come under future REITs, much of which is concentrated in SBDs across the top seven markets. Rising demand from Global Capability Centers (GCCs) and space uptake by technology and BFSI firms is driving occupancy levels. This is expected to accelerate the growth of office REITs in India. For developers and investors, SBDs offer a significant opportunity to capitalize on these high-demand areas, unlocking value and driving long-term growth for their REIT portfolios,” says Badal Yagnik, Chief Executive Officer, Colliers India.
The REIT market in India is still relatively smaller compared to other global markets. Globally, REITs across APAC, Europe, and America have expanded into multiple asset classes such as office, retail malls, industrial warehouses, hospitals, residential apartments, and data centers. Currently, Japan and Singapore are relatively established REIT markets in the APAC region, offering investors a diverse set of underlying real estate assets. In India, however, the REIT and Infrastructure Investment Trust (InvITs) market is smaller in scale, with listed office, retail, and warehousing portfolios. The regulatory environment in India is strong, and REITs can eventually expand to newer asset classes. Notably, SEBI has been advocating for Small and Medium Real Estate Investment Trusts (SM-REITs) in recent years.
“The momentum of REITs in India is steadily gathering pace, fueled by rising investor confidence and growing focus on institutionalization of real estate. Diversification of REITs into different asset classes over the last few years and recent listings have enhanced retail investor participation. Office REITs, in particular, have performed well and currently have a market penetration of around 16%. With strong fundamentals, 25-30% of the overall office stock in India can potentially come under REITs by 2030,” says Vimal Nadar, Senior Director & Head of Research, Colliers India.
REITs in India are increasingly diversifying beyond office spaces, driven by investor demand for higher yields, the need for portfolio resilience, and evolving real estate dynamics. Going forward, similar to mature markets, REITs and InvITs in India can potentially expand into segments such as retail, warehousing, hospitality, and even data centers. Additionally, with a track record in mature markets, rental housing segments such as senior housing, co-living, and student housing can become futuristic REIT bets in India.
Currently, 86% of operational office portfolios under existing REITs are green-certified, reflecting strong alignment with international sustainability benchmarks. Over the next few years, Indian REITs aim to achieve green certification for their entire portfolios and increase renewable energy usage by 30-35%. These measures enhance their appeal to ESG-focused investors and can play a pivotal role in the next growth phase of Indian REITs.
Frequently Asked Questions
What is the current penetration of REITs in India's office market?
Currently, REITs in India have a market penetration of around 16% in the office market.
Which cities have the highest potential for additional REITable office stock?
Bengaluru and Hyderabad lead with 24% and 19% shares, respectively, of the additional REITable office stock.
What factors are driving the growth of office REITs in India?
Rising demand from Global Capability Centers (GCCs) and space uptake by technology and BFSI firms are driving the growth of office REITs in India.
What is the current green certification rate for operational office portfolios under existing REITs?
Currently, 86% of operational office portfolios under existing REITs are green-certified.
What are the future asset classes that REITs in India can potentially expand into?
REITs in India can potentially expand into segments such as retail, warehousing, hospitality, and even data centers.
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