India’s REIT Market Crosses ₹2.3 Lakh Crore, Surpasses Hong Kong
India’s Real Estate Investment Trust sector is making global headlines. The sector has crossed a gross asset value (GAV) of ₹2.3 lakh crore, overtaking Hong Kong in market scale. At present, the equity market capitalisation of India’s listed REIT stands at ₹1.66 lakh crore, reflecting growing investor confidence.
This remarkable growth has occurred in just six years since India’s first listing in 2019. Even more impressive is that only a third of REIT-ready real estate in India has been monetized so far. Therefore, the potential for future expansion remains substantial, paving the way for new investment opportunities.
Strong Fundamentals Driving Growth
Since their inception, Indian REITs have attracted both domestic and international investors. Platforms like Embassy, Mindspace, Brookfield India, Nexus, and Knowledge Realty Trust now dominate the market. These span major cities such as Bengaluru, NCR, MMR, Hyderabad, Pune, Chennai, and emerging tier-II hubs.
Investors benefit from diversified exposure across India’s technology, BFSI, consulting, and retail corridors. This diversification not only reduces risk but also allows investors to capture growth in multiple real estate segments.
The rapid growth demonstrates a strong leasing demand across key office markets. Furthermore, investors are showing a growing preference for transparent, regulated real estate vehicles over direct property ownership.
Income Stability and Capital Growth
Indian REITs provide a dual return profile, combining steady income with capital appreciation. Since listing, unit prices of the first four have risen 25% to 61%, while Knowledge Realty Trust has gained around 12%.
Distribution yields remain stable in the 5.1% to 6% range, which continues to attract income-focused investors. In addition, these distributions are highly tax-efficient, with up to 65% tax-exempt income for unitholders.
In the second quarter of FY26 alone, the five listed REITs distributed over ₹2,331 crore, nearly 70% higher year-on-year. This growth is driven by higher occupancies, new asset acquisitions, and the impact of recent listings. Over the past five years, Indian REITs have delivered an annualized price return of 8.9%, outperforming peers in Singapore, Japan, and Hong Kong.
Operational Strength and Occupancy
Indian portfolios are operating at near-optimal levels, with committed occupancies between 90% and 96%. Collectively, they account for over a fifth of India’s gross office leasing in the quarter.
Re-leasing spreads range from 20% to 36%, while in-place rents show a 15%–24% mark-to-market upside. These factors provide clear visibility for net operating income growth over the next three to four years.
Additionally, all five listed REITs carry AAA credit ratings from CRISIL and maintain conservative leverage. Loan-to-value ratios range from 18% to 31%, reflecting strong balance sheets and prudent financial management.
Insights from Sanjeev Singh, MD – SKJ Landbase
Sanjeev Singh emphasizes, India’s REIT sector is emerging as a structural pillar of commercial real estate. Investors now have access to a product that combines stability, predictable income, and long-term growth.
He adds, “With prime locations, long-lease agreements, and blue-chip tenants, these are not only resilient but also positioned for sustainable expansion. The market’s fundamentals and credit strength make it highly reliable for both retail and institutional investors.”
This perspective highlights why these are gaining popularity as a mainstream investment option rather than remaining a niche segment.
Regulatory Tailwinds Boosting Confidence
Another significant catalyst is SEBI’s reclassification of REIT units as equity-related instruments starting January 1, 2026. This regulatory change will allow REIT to be included in stock indices and enable mutual funds to increase allocations to these instruments.
domestic capital inflows are expect to rise. The reclassification will also help transition from being high-yield alternatives to core components of equity portfolios. Analysts anticipate that this shift could propel the sector past $20 billion in market capitalisation in the near term.
Why Investors Are Eyeing Indian REITs
- Stable Income – Tax-efficient distributions offer attractive post-tax returns.
- Capital Appreciation – Unit prices have steadily risen since listing.
- High Occupancy – Prime office locations ensure minimal vacancy.
- Diversified Exposure – Spread across multiple cities and real estate sectors.
- Strong Credit – AAA-rated REITs with conservative leverage maintain long-term stability.
Together, these factors make Indian REITs a compelling investment option for those seeking both growth and income.
Future Outlook
With robust operational fundamentals, high-quality portfolios, and regulatory support, India’s REIT sector is poised for sustained growth. Investors can expect steady income and capital gains, making REITs an essential addition to long-term portfolios.
The combination of prime locations, high occupancy, strong credit ratings, and regulatory tailwinds positions India’s REITs as one of the most promising investment avenues in Asia.
Sanjeev Singh concludes, “REITs are no longer a niche investment. They have become mainstream, offering transparency, income, and growth potential. The future of India’s REIT market looks extremely promising.”
