REIT market in India crosses ₹2.3 lakh crore in asset value
30 Dec 2025
India’s REIT market has grown into a mainstream asset class, with asset value of about ₹2.3 lakh crore and market capitalisation of nearly ₹1.66 lakh crore, surpassing Hong Kong. Supported by high occupancies, stable yields and strong returns, the sector is set for further growth as Sebi’s equity reclassification from 2026 is expected to broaden investor participation.
India’s Real Estate Investment Trust (REIT) market has emerged as a major institutional asset class, with gross asset value (GAV) touching about ₹2.3 lakh crore and equity market capitalisation reaching nearly ₹1.66 lakh crore as of September 30, 2025, according to a report by Anarock Capital.
Despite only around 32% of India’s REIT-eligible commercial stock being listed, the domestic REIT market has now surpassed Hong Kong in market capitalisation, underscoring the rapid scale-up of the segment since the first listing in 2019.
Following the listing of Knowledge Realty Trust in August 2025, India now has five listed REITs managing a combined portfolio of around 176 million sq ft of Grade-A office and retail space, along with a hospitality platform comprising over 2,000 keys. These assets are spread across major office markets including Bengaluru, Mumbai Metropolitan Region (MMR), NCR, Hyderabad, Pune and Chennai, as well as select tier-II cities.
The sector has delivered strong returns over the medium term. Indian REIT indices have posted a five-year annualised price return of about 8.9%, outperforming peers in Singapore, Japan and Hong Kong, many of which have seen low or negative returns over the same period.
Income visibility has remained stable, supported by high occupancies and rental growth. Trailing distribution yields have held steady in the 5.1–6.0% range. In the second quarter of FY26, distributions by the five listed REITs rose nearly 70% year-on-year to about ₹2,331 crore, aided by new asset additions, improved leasing and the inclusion of Knowledge Realty Trust.
Portfolio fundamentals remain robust, with committed occupancies ranging between 90% and 96%. Re-leasing spreads have stayed strong at 20–36%, while mark-to-market upside on in-place rents is estimated at 15–24%, offering visibility on net operating income growth over the next three to four years. During Q2 FY26, REIT-owned assets accounted for over 20% of pan-India gross office leasing.
Balance sheets across listed REITs remain conservative. All five trusts carry AAA credit ratings, with loan-to-value ratios in the 18–31% range, average borrowing costs of about 7.4–7.5%, and interest coverage ratios between 2.2x and 4.0x. Around 38% of outstanding debt is due for maturity over the next four years, indicating limited refinancing risk in the near term.