Mumbai: India REIT market growth has accelerated sharply over the past six years, transforming the sector from a policy-led initiative into a mainstream investment avenue with a gross asset value (GAV) of nearly ₹2.3 lakh crore.
According to the report ‘India REITs – Taking a Stride’ by ANAROCK Capital, the equity market capitalisation of listed REITs reached approximately ₹1.66 lakh crore as of September 30, 2025.
This scale now exceeds the Hong Kong REIT market, even though only about 32% of India’s REIT-eligible commercial real estate stock has been listed to date.
With the listing of Knowledge Realty Trust in August 2025, India now has five listed REITs controlling nearly 176 million square feet of Grade-A office and retail assets, along with a hospitality portfolio exceeding 2,000 keys.
India REIT Market Growth: From Niche Experiment to Core Asset Class
Vishal Singh, MD – Investment Banking, ANAROCK Capital, says, “Since the first listing in 2019, the sector has expanded rapidly with Embassy, Mindspace, Brookfield India, Nexus, and now Knowledge Realty Trust – India’s largest office REIT by GAV and NOI.
These platforms span Bengaluru, NCR, MMR, Hyderabad, Pune, Chennai, and key tier-II hubs, offering investors diversified exposure to India’s technology, BFSI, consulting, and retail corridors.
Alongside, REIT distributions are tax efficient through a mix of dividend, interest and return of capital, with current distributions offering upwards of 65% tax-exempt income in the hands of unitholders.”
The mandatory distribution of at least 90% of net distributable cash flows has successfully transformed these trusts into efficient yield vehicles, democratizing access to Grade-A commercial real estate for HNIs and retail investors without the opacity or illiquidity of direct property ownership.
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India REIT Market Growth Supported by Income and Capital Appreciation
“The Q2 FY26 scorecard underscores a powerful total-return proposition that has proven remarkably resilient to rate hikes and market volatility,” says Shobhit Agarwal, CEO – ANAROCK Capital.
“Since listing, unit prices for the initial four REITs have surged between 25% and 61%, while the newly listed Knowledge REIT has already gained approximately 12%. This capital appreciation is complemented by steady income generation, with trailing 12-month distribution yields holding firm in an attractive 5.1–6.0% band.
In the second quarter of FY26 alone, the five REITs distributed over INR 2,331 crore — a massive ~70% year-on-year growth driven by occupancy upticks, new asset additions and listing of Knowledge REIT.”
Crucially, Indian REITs indices have delivered a five-year annualised price return of roughly +8.9%, significantly outperforming peers in Singapore, Japan, and Hong Kong, many of which have languished with negative or low-single-digit returns during the same period.
High Occupancy Levels Reinforce India REIT Market Growth
Operational metrics remain strong, with committed occupancies ranging between 90% and 96% across portfolios. In Q2 FY26, the REIT sector accounted for more than 20% of total gross office leasing in India, with Embassy and Knowledge REIT together leasing close to 2.5 million square feet.
Re-leasing spreads continue to remain healthy at 20–36%, while mark-to-market rent upside is estimated at 15–24%, supporting visibility of net operating income growth over the next three to four years.
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India REIT Market Growth: Strong Balance Sheets and ESG Leadership
All five listed REITs maintain AAA credit ratings from CRISIL, with conservative loan-to-value ratios ranging from 18% to 31%.
Average debt costs stand at approximately 7.4–7.5%, while interest coverage ratios range between 2.2x and 4.0x. Nearly 62% of sector debt is backed by long-term maturities beyond the next four years.
On sustainability, Indian REITs rank among global leaders, with all five entities securing GRESB 5-Star ratings and scores in the low-to-mid 90s.
Renewable energy accounts for 38–74% of portfolio power consumption, alongside net-zero commitments extending from 2030 to the early 2040s.
SEBI Reclassification to Accelerate India REIT Market Growth
A major regulatory development is expected to unlock the next phase of expansion. In November 2025, SEBI reclassified REIT units as equity-related instruments, effective January 1, 2026.
This change enables index inclusion from mid-2026 and allows higher allocation limits for mutual funds, broadening domestic investor participation.
