India’s Real Estate Investment Trust (REIT) sector is entering a transformative phase, with market capitalisation expected to rise from $18 billion in 2025 to $25 billion by 2030. Analysts attribute this growth to an expanding inventory of monetisable commercial assets, evolving regulatory frameworks, and the increasing participation of institutional investors, signalling a gradual maturation of a market still in its infancy.
While REITs account for just 19% of India’s listed real estate value compared to the global average of 57%, the gap highlights both under-penetration and long-term growth potential. Currently, the country hosts five listed REITs, primarily anchored in office assets, with a single retail-focused trust. Office properties, spanning over 135 million sq ft of stabilised space, remain the backbone of the ecosystem, offering predictable leasing demand from technology, BFSI, and Global Capability Centre occupiers, generating stable yields of 5-7%. Emerging sectors are expected to drive the next wave of expansion. Warehousing, logistics, industrial parks, and data centres are increasingly being structured for REIT inclusion, reflecting global trends in yield-bearing, income-generating real estate. Residential real estate, while less penetrated due to low rental yields, fragmented ownership, and high tenant churn, presents potential for future REIT adoption through co-living, senior living, and student housing formats, pending a unified policy framework. Retail REITs remain largely untapped despite India having over 89 million sq ft of Grade-A retail stock. Only around 10.6 million sq ft is currently under institutional ownership, leaving significant room for growth.
Analysts suggest that two to three new retail REITs could emerge over the next five years, driven by demand in secondary and emerging urban centres including Indore, Coimbatore, Surat, Chandigarh, and Bhubaneswar. The regulatory landscape is evolving to support broader participation. Small and medium REITs (SM-REITs) allow portfolios valued between Rs. 50-500 crore to enter the formal REIT ecosystem. Operational examples such as PropShare Platina and PropShare Titania indicate increasing adoption among smaller commercial assets, supporting a more diversified and scalable market. Developers are also gearing up to monetise stabilised assets. Bagmane Developers, backed by global investors, has filed a draft prospectus to raise Rs. 4,000 crore through a potential REIT IPO in 2026, marking a possible sixth listed REIT and signalling growing institutional interest.
Urban planners and financial analysts highlight that the expansion of REITs can support sustainable urban development by optimising asset utilisation, enhancing transparency in commercial real estate, and enabling long-term yield stability. As India diversifies its REIT asset classes beyond offices to include retail, logistics, and data centres, the sector is expected to emerge as one of the most dynamic investment avenues globally.
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