Singapore: The Indian REIT market has emerged as a strong investment avenue, delivering distribution yields of 6–7%, well above several mature global benchmarks, according to the latest report released by ANAROCK Capital and CREDAI at the CREDAI NATCON in Singapore.
Since the launch of India’s first REIT in 2019, the market has expanded steadily, reaching a capitalization of around USD 18 billion as of August 2025.
With three additional REITs expected over the next four years, the sector is projected to surpass USD 25 billion by 2030, as highlighted in the report titled “Indian REITs: A Gateway to Institutional Real Estate.”
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Indian REIT Yields Outperform Global Peers
Shobhit Agarwal, CEO of ANAROCK Capital, noted that Indian REIT yields currently average between 6–7%, significantly higher than those in markets such as the US and Singapore. “The distribution yields are competitive with fixed-income instruments while offering the additional benefit of capital appreciation,” he said.
CREDAI on Future of Indian REIT Diversification
Shekhar Patel, President of CREDAI, highlighted that while over 60% of India’s REIT market value is currently concentrated in Grade A office assets linked to IT and BFSI sectors, the future will see wider diversification. “As India’s cities expand and infrastructure strengthens, REITs will increasingly tap into logistics, retail, housing, and new-age assets such as data centres,” he said.
Market Penetration of Indian REITs
Despite SEBI introducing REIT guidelines in 2014, India’s REIT penetration stands at just 20% of institutional real estate. This is considerably lower compared to the US (96%), Singapore (55%), and Japan (51%). The concentration in commercial office assets has limited diversification, though the market is poised to expand into new asset classes.
Data Centres and Logistics REITs Driving Future Growth
Globally, data centre REITs were valued at nearly USD 250 billion in 2024 and are projected to double within seven years. India is expected to mirror this trend, supported by a 60% year-on-year surge in industrial and logistics leasing in H1 2025, a 30% rise in warehousing absorption, and a threefold jump in institutional investment to USD 2.5 billion in 2024.
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Regulatory Reforms Strengthening Indian REIT Market
The Securities and Exchange Board of India (SEBI) has progressively strengthened the REIT framework since 2014. Recent reforms, including reduced lot sizes, simplified capital gains, and dividend tax exemptions introduced in 2025, have enhanced transparency and retail participation.
Outlook for Indian REIT Sector
Although residential REITs remain a longer-term prospect due to low rental yields and fragmented ownership, India’s overall REIT penetration could rise to 25–30% of institutional real estate by 2030.
Backed by favourable demographics, rapid urbanization, and robust GDP growth, the Indian REIT market is positioned to become one of the fastest-growing REIT markets globally.
Attractive yields, rental escalations, and the prospect of capital appreciation ensure that Indian REITs will play a pivotal role in shaping the country’s institutional real estate landscape.
