The growing maturity of Real Estate Investment Trusts (REITs) is set to transform India’s office space market in 2025, attracting both domestic and international institutional investors, according to Anarock’s latest report.

Peush Jain, Managing Director-Commercial Leasing & Advisory at Anarock, highlighted that 2024 marked a milestone for India’s top seven cities, with net office absorption hitting a record 50 million square feet. “The market witnessed robust activity throughout the year, driven by strong occupier demand and strategic expansion plans of various sectors,” he said.

India’s emergence as a preferred hub for Global Capability Centres (GCCs) remains a key driver of office space absorption. Anarock predicts REITs will play an increasingly critical role in shaping this landscape, as their strong performance attracts institutional capital, enhances asset quality, and promotes professional management practices across the sector.

Reinforcing this trend, Sattva Group and Blackstone-backed Knowledge Realty Trust recently filed a Draft Red Herring Prospectus (DRHP) with SEBI to raise up to ₹6,200 crore through an REIT public issue. India currently has four listed REITs—Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust. While the first three are office-focused, Nexus primarily owns retail real estate assets.

Anarock also highlighted evolving workplace strategies, with companies prioritizing premium office spaces equipped with advanced technology and sustainable features. “While hybrid work models remain prevalent, organisations are reimagining their office spaces to enhance collaboration, innovation, and employee well-being,” the report noted.

The rising demand for managed workspaces has also pushed co-working giants like WeWork India and Smartworks to file DRHPs, aiming to raise funds for expansion. Some are also exploring private equity investments, while fractional real estate platforms consider Small and Medium REITs (SM-REITs) to attract small investors.

Shesh Rao Paplikar, Founder of Bhive Workspaces, emphasized the significance of IPOs for the sector. “A public listing is one of the most important milestones for any company, reflecting business maturity and consumer trust. The co-working sector has reached this stage in under 15 years, posting healthy revenues and profits,” he said.

Darshan Govindaraju, Director of Vaishnavi Group, echoed this sentiment, stating that commercial real estate’s stability and growth potential continue to attract institutional and retail investors. “The launch of REITs and SM-REITs has created new avenues for small investors to actively participate in the commercial real estate boom,” he added.

With institutional investment surging and co-working operators tapping public markets, India’s office space landscape is on the brink of a transformative year.