India’s listed commercial office REITs are expected to expand their leasable portfolio by 40-45 million sq. ft. by FY28, according to Crisil Ratings. Strong leasing demand, strategic acquisitions, rental growth, and disciplined leverage are expected to fuel the sector’s next phase of growth, benefiting investors and the flexible workspace ecosystem.
India’s commercial office REIT market is poised for significant expansion over the next two years as listed real estate investment trusts continue to strengthen their portfolios through strategic acquisitions and new asset additions. According to Crisil Ratings, the total leasable office area under listed REITs is projected to increase by 40-45 million sq. ft. by the end of FY28, taking the combined portfolio to nearly 190-195 million sq. ft. The expansion will be supported by both the addition of a recently listed REIT and the acquisition of completed, income-generating office assets, reflecting a strategy focused on reducing development risks while accelerating growth.
The report highlights that acquisitions have remained the preferred route for expansion since India’s first office REIT was listed seven years ago. Nearly three-fourths of all portfolio additions have come through operational assets rather than greenfield developments. Right of First Offer (ROFO) agreements with sponsor groups are also expected to remain a key growth driver, giving REITs access to premium commercial properties while ensuring a consistent pipeline of high-quality office assets.
Flexible Workspaces and GCCs Continue to Drive Demand
Healthy leasing activity across India’s office market continues to support REIT performance. Flexible workspace operators, banking, financial services and insurance (BFSI) companies, and Global Capability Centres (GCCs) remain among the largest occupiers of Grade A office space across key business districts.
Highlighting the demand outlook, Gautam Shahi, Senior Director, Crisil Ratings, said, “Addition in commercial office space is accompanied by healthy demand growth from flexible workspace operators, banking, financial services and insurance institutions, and global capability centres cutting across sectors. This, combined with their good location and high quality, will keep occupancy at a stable 92-93% for REITs this fiscal, higher than the occupancy of the overall commercial office sector.”
This sustained demand is expected to help REITs maintain occupancy levels well above those of the broader office market, reinforcing the appeal of premium commercial assets.
Stable Financials Support Long-Term Expansion
Apart from strong leasing momentum, contractual rental escalations are expected to sustain healthy operating performance. Crisil estimates EBITDA margins will remain around 70%, allowing REITs to generate robust cash flows even as they continue expanding their portfolios. Although future acquisitions will increasingly rely on debt financing due to mandatory income distributions to unitholders, leverage is expected to remain well-managed. The report projects the sector’s loan-to-value ratio to stay between 26% and 28% through FY28, supported by growing asset values.
Another positive factor is portfolio diversification. Listed REITs have exposure across multiple industries and cities, limiting concentration risks while providing resilience against fluctuations in individual sectors or regional markets.
Positive Outlook with a Few Watch Points
While the overall outlook remains optimistic, Crisil notes that evolving workplace strategies, the growing adoption of artificial intelligence, global economic uncertainties, and additional office supply could influence future demand patterns. Nevertheless, the sector’s fundamentals remain strong.
For the coworking and flexible workspace industry, the projected expansion presents fresh opportunities. As REIT portfolios grow and premium office inventory increases, operators will have greater access to institutional-grade assets in prime business locations. Combined with sustained demand from enterprise occupiers and GCCs, India’s commercial office REIT market appears well-positioned to remain a key pillar of the country’s evolving office real estate landscape through FY28.
