India presents significant opportunities for developing REIT-able assets, driven by strong demand for institutional-grade real estate, increasing investor interest, and evolving regulatory frameworks, according to CareEdge. The report anticipates a sustained expansion of India's REIT portfolio in FY26 and ahead, fuelled by upcoming REIT launches and the abundant availability of high-quality, REIT-worthy assets.
According to the report, the Indian office REIT segment has witnessed remarkable growth, with total operational stock expanding at a CAGR of 7 per cent over the six years ended CY24. Additionally, REITs have consistently accounted for over 9 per cent of the total office stock across India’s top eight cities, reflecting their growing prominence in commercial real estate.
Rajashree Murkute, Senior Director & Head of Corporate & Infra Ratings CareEdge, said, "The Indian REIT market is poised for sustained expansion, fueled by a combination of upcoming REIT launches and the abundant availability of high-quality, REIT-worthy assets. This growth is expected to be driven by a robust Grade A commercial real estate pipeline and increasing investor interest in diversified sectors”.
India entered the REIT space in 2019 with the launch of Embassy REIT, followed by Mindspace REIT and Brookfield REIT in 2020. In 2023, Nexus REIT, India’s first retail-focused REIT, was listed on domestic exchanges, marking a significant milestone for the sector. Additionally, Knowledge Realty Trust (sponsored by The Blackstone Group and The Sattva Group), with an operational leasable area of 37.1 msf, is proposed to be listed as a REIT by H1 FY26.
From a financial standpoint, Indian REITs maintain a conservative leverage profile, with a Net Debt to Gross Asset Value (GAV) ratio of 28 per cent as of 31 December 2024. Furthermore, stringent regulations enforced by the Securities and Exchange Board of India (SEBI) have strengthened the structural integrity of REITs, enabling them to access external debt at competitive interest rates.
According to the report, the document sees a Large Pipeline of Grade A Commercial Real Estate, Strong Demand for Commercial Properties, and Expansion Beyond Office REITs and SME REITs as Opportunities for the Development of REIT-able Assets. India has a substantial inventory of high-quality office spaces, particularly in the top eight cities. These assets are already leased to blue-chip MNCs, ensuring stable rental income.
The growth of IT, BFSI, and Global Capability Centres (GCCs) in India drives strong demand for high-quality commercial real estate. Companies increasingly seek sustainable, well-located, and technology-enabled office spaces, creating opportunities for developers to build REIT-ready assets catering to corporate occupiers.
Divyesh Shah, Director & Rating Head - Real Estate, said, "While the current REIT market in India is office-focused, there is growing interest in diversifying into retail and hospitality sectors. Organised retail rapidly grows due to rising e-commerce penetration and strong demand for modern retail spaces. This presents an opportunity for developers to create REIT-able assets in this sector."
SEBI has recently introduced SM REITs, with a minimum asset value for investment of Rs 50 crore, as opposed to Rs 500 crore for traditional REITs. The move will likely widen market participation, enhance liquidity, and boost real estate development in Tier-1 and Tier-2 cities
