REITs stay resilient amid West Asia crisis, set for strong growth: CareEdge
Aug 20,2026
Over 150 million sq ft of office space is expected to become REIT-eligible by 2031, potentially increasing the sector's asset value from nearly $33 billion to over $50 billion
Indian Real Estate Investment Trusts (REITs) remained resilient amid the ongoing West Asia crisis, and the REIT sector could witness substantial future growth as over 150 million sq ft of office space is expected to be REIT-eligible by 2031, CareEdge Ratings said on Thursday.
“While the geopolitical situation in West Asia remains a key monitorable, the near-term impact on the Indian real estate sector is expected to remain limited. Healthy demand, and stable leasing activity across commercial real estate should support the sector's overall performance,” Rajashree Murkute, senior director at CareEdge Ratings, said.
The rating agency said that over 150 million sq ft of office space is expected to become REIT-eligible by 2031, setting up the sector for significant growth. This, according to the rating agency, could increase the sector’s asset value from nearly $33 billion to over $50 billion.
CareEdge also said that office leasing demand remained strong in the first quarter of 2026, with transactions touching a record 29.9 million sq ft, despite the impact of the ongoing geopolitical crisis.
Global Capability Centres (GCCs) were the key growth driver, with a 48 per cent contribution to total transactions, up from 44 per cent last year, with Bengaluru recording the highest volume.
According to the rating agency, occupancy trends across listed office REITs exceeded 90 per cent, with average occupancy rising from around 84 per cent in FY24 to 89 per cent in FY25, to about 92 per cent in FY26. Further, rental income across the listed office REITs increased by an average of 20 per cent.
“As demand continued to outpace supply, vacancy declined over the period while rent escalation supported healthy rental income in the sector,” Murkute added.
Data from CareEdge showed that India’s six listed REITs have a combined gross annual value of around ₹3.13 lakh crore and a market capitalisation of more than ₹2 lakh crore.
“The sector remains supported by long-term lease contracts with a healthy Weighted Average Lease Expiry (WALE), diversified tenant portfolios, and sustained demand from GCCs, providing strong visibility into rental cash flows and limiting the impact of short-term disruptions,” Divyesh Shah, director at CareEdge Ratings, said.