India’s REIT market is on a strong growth trajectory, expanding beyond office spaces into retail and hospitality. Backed by stable financials, rising demand for Grade A assets, and supportive regulations like Small and Medium REITs, the sector is set to attract broader investor interest across major and emerging cities.
India’s Real Estate Investment Trust (REIT) market is witnessing strong growth, fueled by steady office space development, sectoral diversification, and supportive regulations. According to a recent report, operational REIT stock in the country has grown at a 7% compound annual growth rate (CAGR) over the past six years, making up more than 9% of total office stock across India’s top eight cities.
Since the launch of Embassy REIT in 2019, followed by Mindspace and Brookfield REITs in 2020, India has steadily expanded its REIT footprint. The 2023 listing of Nexus REIT, the country’s first retail-focused trust, marked a pivotal step in diversifying beyond office assets. Another player, Knowledge Realty Trust—backed by Blackstone and the Sattva Group—is expected to join the market by the first half of FY26, further expanding investor access.
REITs in India maintain a healthy financial position, with a net debt-to-gross asset value (GAV) ratio of 28% as of December 2024. This conservative debt profile and the Securities and Exchange Board of India’s (Sebi) strict regulations ensure financial stability and easier access to competitive external funding.
The growing demand for Grade A commercial properties, especially in major cities, drives the development of REIT-worthy assets. These urban hubs boast high-quality office spaces leased to blue-chip multinationals, providing a dependable rental income stream. Expansion in sectors like IT, BFSI, and Global Capability Centres (GCCs) is further pushing demand for modern, sustainable, and tech-enabled office environments.
Developers are increasingly aligning projects to meet REIT standards. “While the current REIT market is mostly office-focused, there is growing interest in diversifying into retail and hospitality sectors,” said Divyesh Shah, Director & Rating Head – Real Estate at CareEdge Ratings. He noted the rise of organised retail, driven by e-commerce growth and modern retail demand, as a key opportunity.
In a move aimed at democratising real estate investment, Sebi has introduced Small and Medium (SM) REITs, lowering the minimum asset requirement from ₹500 crore to ₹50 crore. This regulatory shift is expected to boost participation, enhance liquidity, and promote real estate development across Tier-1 and Tier-2 cities.
With regulatory support, financial discipline, and sector-wide demand, India’s REIT market is positioned for robust growth in the coming years.
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