As Work from Office mandates rise, India’s REITs are poised to boom, say Brookfield Properties and Embassy REIT CEOs
March 07, 2025
Ritwik Bhattacharjee, CEO of Embassy REIT said India's commercial real estate cycle offers immense potential, while Alok Aggarwal, MD & CEO of Brookfield Properties said rising occupancy rates are an indicator of recovery in demand.
The mandate for return to office have surged and vacancies under SEZs are on the decline, said Ramesh Nair, CEO of Mindspace REIT, while speaking at the Moneycontrol Global Wealth Summit on REITs in Mumbai on March 7. "Work-from-office rates have reached 80 percent now, from just 10 percent in 2020. SEZ vacancies are decreasing due to government demarcation policies," Nair said, underscoring the recovery in rentals for office spaces after the pandemic setback.
Echoing the sentiment, Ritwik Bhattacharjee, CEO of Embassy REIT said India is still in the early stages of a commercial real estate cycle with immense growth potential. "Office will continue to dominate the REIT space. Indian office rents are still very attractive. Data centres, logistics, and value-added services will follow offices in REIT opportunities," Ritwik Bhattacharjee said.
Alok Aggarwal, MD & CEO of Brookfield Properties pointed out that the rising occupancy rates in commercial spaces is a key indicator of demand recovery. "Occupancies have gone up from 80 percent to over 90 percent in the last 9-12 months. The best of times are unfolding for REITs in the short, medium, and longer term," Alok Aggarwal said.
Brookfield Properties CEO pointed to the massive growth potential for India’s REITs, that currently account for only 10-12 percent of the real estate market. "REIT AUM can grow 15-20 times in the next 15-20 years. Investors have realized that there is no substitute for offices. They are focused on rental growth, occupancy, and ESG," said Alok Aggarwal, MD & CEO of Brookfield Properties, underscoring REITs’ potential of generating passive income.
Ritwik Bhattacharjee of Embassy REIT urged investors to consider a diversified portfolio, while investing in this space. "REITs are high dividend-paying stocks, and the story is panning out well. Investors should look at a basket of REITs," he added. The commercial real estate sector in India is witnessing a strong resurgence with returns from REITs in 2024 already touching 21 percent. Industry leaders believe as regulatory clarity improves and new asset classes like data centre and hospital REITs emerge, the sector will be pivotal to India's economic growth.