India’s REIT Market Hits ₹1 Lakh Crore Cap; Projected to Surge to ₹10.8 Lakh Crore
India’s Real Estate Investment Trust (REIT) market has reached a milestone, recording a ₹1 lakh crore market capitalisation. This achievement confirms the sector’s maturation from an emerging concept to a compelling investment vehicle, having grown six-fold since its inception.
According to real estate management firm JLL, the Indian REIT sector is poised for massive expansion, with a projected opportunity size of ₹10.8 lakh crore across the office and retail sectors in India’s top seven cities by 2029.
1. Core Strengths: Yield Stability and NOI Growth
The robust underlying performance of the sector validates office real estate as an attractive investment category, characterized by stable Net Operating Income (NOI) and consistent distributions.
Yield Stability: All three listed office REITs have demonstrated consistent NOI improvements. Distribution yields across these REITs have ranged stably between 6% and 7% during FY25, offering predictable income to investors.
Borrowing Capacity: The sector remains financially resilient, with India’s five REITs possessing approximately ₹230 billion in available borrowing capacity, calculated conservatively at 35% of their market value.
2. Performance Highlights Across Major REITs
Individual REIT performance demonstrates strong growth and efficiency in managing commercial assets:
Nexus Select Trust REIT: Recorded a 6% Compound Annual Growth Rate (CAGR) in NOI since its listing in May 2023.
Embassy REIT: Maintains the highest absolute NOI throughout the analysis period, reflecting its established market presence and larger portfolio size.
Brookfield REIT: Showed particularly strong expansion with a 31% CAGR in NOI over four years, rapidly growing its portfolio from four assets at listing to 11 properties as of September 30.
3. Maturing Investor Base and Ownership 🏦
The growing maturity of the REIT sector is clearly reflected in its unit holding pattern.
Institutional Shift: There has been a substantial increase in institutional holdings, including major financial players such as:
Mutual Funds
Insurance Companies
Pension Funds
Sovereign Wealth Funds
NBFCs (Non-Banking Financial Companies)
This shift towards institutional ownership signals greater confidence and stability within the REIT market.
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