Union Budget 2026: Boosting Real Estate and Infrastructure with CPSE REITs
The government, in the Union Budget 2026–27, has given a fresh thrust to infrastructure financing and public asset monetization. It has announced the creation of dedicated Real Estate Investment Trusts (REITs) for Central Public Sector Enterprises (CPSEs).
In her speech, FM Nirmala Sitharaman proposed to accelerate the recycling of CPSE-owned real estate through REIT structures, which marks a strategic shift from passive asset ownership to transparent monetization. This move is expected to unlock significant value from underutilized assets while providing a new avenue for investment in the real estate sector.
The Budget also reaffirmed the government’s infrastructure focus, particularly in Tier II and Tier III cities with populations exceeding five lakh, which have emerged as new growth centers. These cities are poised to benefit from enhanced infrastructure development, which will not only improve urbanization but also create new economic opportunities.
According to Apurva Muthalia, Business Head – Real Estate at Equirus Family Office, the creation of REITs for PSU-owned real estate assets can be a structural positive for both the public sector and capital markets. It enables PSUs to free up capital from their balance sheets while retaining operational control over strategic assets. At the same time, it deepens the REIT market by offering investors access to stabilized, income-generating assets leased to quasi-sovereign entities. This creates a strong proposition for retail investors, asset managers, and institutional investors, while unlocking value for PSUs that own multiple commercial office properties.
The Indian REIT Association said, “The proposal to monetize large, underutilized government-owned real estate through REIT structures is a strong signal of intent. It reflects a clear move from passive ownership to efficient, market-linked asset management, while unlocking long-term value from mature public assets and recycling capital into fresh infrastructure development,” the association said in its post-Budget statement.
Rishi Anand, MD & CEO, Aadhar Housing Finance Limited, said, “With clear targets for credit expansion, technology adoption, and reforms in Banking and NBFCs, there is a clear direction to scale responsibly. The emphasis on infrastructure development in Tier II and III towns will act as a catalyst towards creating opportunities for the underserved and unserved communities in these markets, meet the growing urbanization needs, and create meaningful impact for communities across India. This will further strengthen the housing for all mission and spur demand for affordable housing.”
Shiv Parekh, Founder and CEO, hBits, a fractional ownership platform that enables investors to participate in high-quality commercial real estate assets, said, “The Union Budget 2026 sends a positive signal for India’s investment ecosystem, especially through its focus on innovative financing tools. The move to introduce dedicated REITs for monetizing CPSE assets and strengthen infrastructure-linked investment vehicles can help unlock private capital and improve market liquidity. This opens up more stable, yield-focused investment opportunities for both institutional and retail investors.”
Overall, the introduction of CPSE REITs in the Union Budget 2026-27 is a significant step towards enhancing the real estate and infrastructure financing ecosystem in India. It not only provides a new avenue for investment but also helps in the efficient utilization of public assets, contributing to the broader goal of sustainable economic growth.
