India REITs can eye an additional ~ INR 10.8 trillion market growth opportunity over the next 4 years across office and retail sectors: JLL
MUMBAI, NOV 29: India’s Real Estate Investment Trust (REIT) market has achieved a landmark milestone in FY 2025, crossing the INR 1 trillion market capitalization threshold. According to JLL’s “Emerging Horizons – Analyzing REIT Performance in India’s Evolving Real Estate Market” report, this milestone achievement in just six years signals the start of an exceptional period of growth ahead, with the REIT sector positioned for an additional INR 10.8 trillion (USD 122-125 billion) expansion opportunity across office and retail sectors in just India’s top seven cities by 2029.
Indian REIT market has achieved remarkable expansion over six years, with market capitalization growing from INR 264 billion (USD 3.1 billion) in FY 2020 to INR 1.6 trillion (USD 19 billion) as of 30th September 2025. The sector has evolved from a single REIT managing 33 million sq ft in 2019 to five listed REITs collectively controlling 174 million sq ft of leasable office and retail space, highlighting its robust growth trajectory.
From newcomer to a rising force 40 percent CAGR in market cap in 6 years span
“India’s REIT sector has evolved from an emerging concept to a compelling investment vehicle, with market capitalization surging 6-fold from INR 264 billion to INR 1.6 trillion in H1 FY2026. This remarkable 40% CAGR trajectory across 6 years reflects increasing investor confidence in commercial real estate as an institutional asset class. Also, the unit holding pattern reveals substantial increase in institutional holdings by mutual funds, insurance companies, pension funds, sovereign wealth fund, NBFCs etc. reflecting the market’s increasing maturity and that these major financial institutions view REITs as a reliable investment option. India’s five REITs have approximately INR 230 billion in available borrowing capacity considering a conservative 35% of the market value. This gives them significant firepower to acquire premium properties and expand their portfolios. As we see continued expansion with strategic acquisitions and steady Net Operating Income (NOI) growth across the sector, Indian REITs are proving their value as stable, income-generating instruments that provide investors with direct access to India’s thriving commercial real estate market.” said Lata Pillai, Senior Managing Director & Head of Capital Markets, India, JLL.
The REIT market has demonstrated remarkable resilience and growth despite global economic uncertainties, with uniform positive NOI trajectories across all the listed REITs underscoring the robustness of the country’s commercial sector. Embassy REIT maintains the highest absolute NOI throughout the analysis period, reflecting its larger portfolio and established market presence. With respect to growth rate Brookfield has seen a significant 31% CAGR in NOI. Brookfield has grown from a foundation of four assets on listing to a portfolio of eleven properties as of 30th September 2025, within just four years. This strategic growth, driven by acquisitions in coveted urban markets, has delivered substantial improvements across all key financial performance indicators. In contrast, Embassy and Mindspace began operations with larger initial asset portfolios and have since then exhibited steady growth.
The consistent NOI improvements across all three office REITs validate that Indian office real estate remains an attractive investment category with strong underlying performance metrics, successfully weathering post-pandemic workplace disruptions and remote work challenges that have affected markets globally. Nexus Select Trust REIT too has witnessed a 6% CAGR in NOI since its listing in May 2023. It has strategically positioned itself to capitalize on the broader retail real estate recovery following the pandemic disruption. The REIT is effectively capturing the surge in pent-up consumer demand as shoppers return to physical retail spaces, resulting in increased footfall and higher revenue generation across their portfolio.
(Note: Knowledge Realty Trust REIT (KRT) got listed in August 2025 and it has not been considered for the performance study of market cap growth, NOI, and distribution.)
Distribution yields across these REITs have ranged between 6% to 7% during FY2025. The overall steady distributions trend continues in H1 FY2026 across all three REITs suggesting that high-quality office buildings in the key cities continue to deliver stable and predictable cash flow for investors. Gross Asset Value (GAV) performance has been equally impressive, with total GAV across the four office REITs increasing by 40 % CAGR from INR 330 billion to INR 2.1 trillion, demonstrating significant expansion of institutionally owned office real estate. Strong leasing fundamentals were evident with combined occupancy rates of office REITs reaching 91 % as of September 2025 of all four office REITs. Since its public listing in FY 2024, Nexus too has delivered value creation, achieving 10 % CAGR in GAV growth as of H1 FY 2026.
Growing institutional investment and market confidence
The office sector has been the mainstay of Indian REITs so far with the REITs’ share in the total Grade A office stock across India’s top seven cities showing a dramatic growth from just 4.2% in 2019 to approximately 15% as of June 2025.The sector has witnessed remarkable institutional adoption, with Embassy REIT demonstrating the most dramatic shift from 70% sponsor holdings to just 8%, while institutional ownership surged to 75%. This transformation reflects institutional investors’ increasing comfort with Indian REITs as an asset class. Also, Nexus Select Trust shows rapid institutional uptake from 17% to 36% within just one year, while retail participation remained robust at 42%. This institutional migration typically enhances market stability, liquidity and professional management oversight.
The sector received a significant boost in September 2025 when the Securities and Exchange Board of India (SEBI) reclassified REITs as equity instruments, aligning with global practices. This strategic move enables REIT inclusion in equity market indices while facilitating increased mutual fund allocations and expanding institutional investor access.
“India’s REIT market has flourished on the foundation of robust office sector performance and strong consumption dynamics driving the physical retail landscape. The recent SEBI regulatory reforms introducing Small and Medium REITs (SM REITs) and granting equity status to REITs are poised to catalyze future listings while broadening investor participation and enhancing access to capital markets. The market opportunity ahead is substantial, with investment-grade office assets presenting a USD 66-68 billion runway and retail markets offering an additional USD 32-33 billion potential—creating significant headroom for both existing REIT acquisitions and new market entrants. The pipeline of upcoming institutional-grade supply across office and retail segments provides ready-to-deploy brownfield assets for accretive portfolio expansion. Looking forward, we anticipate a potential 5-fold market expansion in the next 4 years from the current GAV of INR 2.1 trillion, with emerging asset classes also likely to create an increasingly diversified and accessible REIT ecosystem that appeals to a broader spectrum of investors,” said Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.
Massive growth runway ahead
The REIT market presents exceptional sector-wise expansion opportunities across multiple real estate segments. The office sector alone leads with high-quality assets representing an additional market opportunity valued at INR 5.9 trillion (USD 66.6-68.7 billion), offering potential 4X growth for office REITs. Additionally, the retail segment provides substantial diversification potential with opportunities across India’s top seven cities valued at INR 2.8 trillion (USD 32-33 billion). Future development pipeline adds another growth dimension through 70 million sq ft of under-construction and planned supply with institutional participation, valued at INR 2.1 trillion (USD 23 billion).
Only the office and retail sector put together presents an opportunity of approximately INR 10.8 trillion (USD 122-125 billion), representing potential 5-fold expansion from current market value (GAV).
Taking a conservative debt cap at 35 % of GAV, the five REITs collectively possess approximately INR 230 billion (USD 2.6 billion) in untapped debt capacity as of 30th September 2025. This provides a substantial financial power to pursue high-value marquee properties and execute transformational portfolio acquisitions that can significantly scale their market presence. The Indian REIT market is positioned for exponential growth, with the current market capitalization of INR 1.6 trillion representing just the beginning of a much larger opportunity. The Indian REIT market is positioned for exponential growth, with the current market capitalization of INR 1.6 trillion representing just the beginning of a multi-year, growth opportunity cycle. The convergence of institutional capital, regulatory support and substantial asset pipeline positions India’s REIT market for exponential growth over the next 5-7 years, making strategic positioning critical for market leadership.
