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Indian Real Estate Investment Trusts (REITs) are gaining momentum, delivering average distribution yields of 6–7%—well above global benchmarks. According to the joint industry report Indian REITs: A Gateway to Institutional Real Estate by ANAROCK Capital and CREDAI, the sector has reached a market capitalization of USD 18 billion as of August 2025 and is projected to cross USD 25 billion by 2030.
Since the first REIT listing in 2019, India’s REIT market has expanded steadily, supported by strong fundamentals, deep office demand, and a proactive regulatory environment. Shobhit Agarwal, CEO – ANAROCK Capital, stated, “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 among others. Average distribution yields of Indian REITs are competitive with fixed-income instruments but have the added potential for capital appreciation.”
Mr. Shekhar Patel, President, CREDAI, added, “Over 60% of India’s REIT market value today rests with a very small set of players, with a strong base 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. This transformation will unlock unprecedented opportunities for investors and firmly place India among the most dynamic REIT markets in the world.”
Despite REIT guidelines being introduced in 2014, India’s REIT market accounts for just 20% of institutional real estate—far below the USA (96%), Singapore (55%), and Japan (51%). This limited penetration is largely due to concentration in Grade A commercial office assets, which offer scale, transparency, and stable cash flows. However, diversification is underway, with data centres and logistics REITs gaining traction amid rising digital demand and e-commerce growth.
Globally, data centre REITs were valued at ~USD 250 billion in 2024 and are projected to double within seven years. India is expected to mirror this trend, as evidenced by a 60% YoY surge in industrial and logistics leasing in H1 2025, a 30% YoY rise in warehousing absorption, and a threefold increase in institutional investment to USD 2.5 billion in 2024.
Out of the total REIT-worthy office stock of approximately 520 million sq. ft. across India’s top seven cities, only 32%—or 166 million sq. ft.—is currently listed. Residential REITs remain a longer-term prospect, constrained by low rental yields and fragmented ownership. However, with more asset classes becoming REITable, India’s penetration could rise to 25–30% of institutional real estate by 2030.
The regulatory environment has played a pivotal role in shaping investor confidence. Since SEBI’s introduction of REIT regulations in 2014, progressive reforms—including reduced lot sizes, simplified capital gains, and dividend tax exemptions introduced in 2025—have strengthened transparency, retail participation, and long-term stability. That said, in developed markets like the USA and Singapore, dividends from REITs are generally taxed at lower rates, making them more attractive for retail investors compared to India.
All in all, the Indian REIT market, though relatively young, is on a strong growth trajectory. Supported by favourable demographics, rapid urbanization, and sustained GDP growth, REITs are set to become a mainstream investment avenue for both domestic and global capital. The combination of regulatory confidence, market depth, and diversification ensures that REITs will play a defining role in shaping the future of Indian real estate.
