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India is emerging as a fast-growing market for real estate investment trusts (REITs) as developers increasingly monetise rent-yielding commercial assets, according to Vestian. The report highlights strong potential driven by high-quality office spaces, retail centres, warehouses, and data centres that offer steady rental income. India currently has five listed REITs, largely focused on office assets, covering over 135 million square feet. REIT market capitalisation is expected to rise from about USD 18 billion in 2025 to nearly USD 25 billion by 2030. While office assets continue to lead, growing interest in logistics, data centres, and industrial assets is set to support the next phase of REIT growth.
India is well positioned to emerge as one of the most dynamic real estate investment trust (REIT) markets globally, as developers increasingly look to monetise rent-yielding commercial assets through this structure, according to a report by real estate consultancy Vestian. Advertisement
The US-based firm said India's REIT market offers strong growth potential due to the availability of high-quality commercial assets, including office spaces, retail centres, warehousing facilities, and data centres. These assets, the report noted, are well suited for monetisation through REITs, providing stable income streams for investors.
REITs are investment vehicles that own or operate income-generating real estate, allowing investors to earn returns from rental income without directly owning properties. In India, there are currently five listed REITs: Knowledge Realty Trust backed by Sattva Group and Blackstone, Mindspace Business Parks REIT backed by the K Raheja Group, Brookfield India Real Estate Trust, Embassy Office Parks REIT, and Nexus Select Trust.
Vestian said India's REIT market capitalisation is projected to grow from about USD 18 billion in 2025 to nearly USD 25 billion by 2030. With a growing pool of REIT-ready assets and increasing investor acceptance, the consultant said the market is gradually moving from an early stage to a more mature phase.
At present, four of the five listed REITs are office-focused, while Nexus Select Trust is backed by retail assets. Office properties continue to anchor the REIT landscape, with listed portfolios covering more than 135 million square feet. These assets benefit from consistent leasing demand from global capability centres, technology companies, and BFSI occupiers, supporting stable rental yields in the range of 5 to 7 per cent.
India has more than 1 billion square feet of office stock, of which nearly 500 million square feet is considered suitable for REIT listings. Vestian said the expansion of this office base, along with the gradual inclusion of retail and alternative assets, is expected to support the next phase of REIT growth.
The report noted that asset diversification will be key to scaling the market. Emerging segments such as data centres, logistics parks, industrial estates, and warehousing are gaining traction and offer long-term, yield-bearing opportunities aligned with global REIT trends.
On the residential side, Vestian said the sector is not yet ready for large-scale REIT participation. Low rental yields of 2 to 3 per cent, fragmented ownership, frequent tenant turnover, and the absence of large institutional rental portfolios continue to pose challenges. The lack of a unified national rental housing policy also limits the viability of residential REITs at this stage.
While formats such as co-living, student housing, and senior living show promise, Vestian said residential REITs are likely to remain a longer-term prospect in India.
The report comes at a time when new listings are being planned. Recently, Bengaluru-based Bagmane Group-backed Bagmane Prime Office REIT filed draft papers with the market regulator to raise up to INR 4,000 crore through an initial public offering. If successful, it would become the sixth listed REIT in India.
With increasing institutional interest, supportive regulations, and a growing stock of income-generating assets, India's REIT market is expected to play a larger role in shaping commercial real estate investment over the coming decade.
Source: PTI
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