India’s REIT market crosses ₹2.3 lakh crore in gross asset value, overtakes Hong Kong in scale
India’s Real Estate Investment Trust (REIT) sector has reached a gross asset value of about ₹2.3 lakh crore, crossing Hong Kong’s REIT market in market capitalisation, a report by Anarock said. The equity market capitalisation of the country’s listed REITs now stands at around ₹1.66 lakh crore, it said.
The surge has occurred in just six years since India’s first REIT listing, even as only about a third of the country’s REIT-ready real estate stock has been monetised so far, indicating significant headroom for future growth.
“Since the first listing in 2019, the sector has expanded rapidly with Embassy, Mindspace, Brookfield India, Nexus, and now Knowledge Realty Trust, India’s largest office REIT by GAV and NOI. These platforms span Bengaluru, NCR, MMR, Hyderabad, Pune, Chennai, and key tier-II hubs, offering investors diversified exposure to India’s technology, BFSI, consulting, and retail corridors,” Vishal Singh, MD – Investment Banking, ANAROCK Capital, said.
Additionally, REIT distributions are tax-efficient through a mix of dividends, interest, and return of capital, with current distributions offering upwards of 65% tax-exempt income in the hands of the unitholder, he said.
The report stated that the sector’s rapid expansion reflects strong leasing demand across key office markets and a growing preference for transparent, regulated real estate vehicles over direct ownership.
Also Read: Institutional investments in India’s real estate sector are projected to soar to $10.4 billion: Report
Income stability and capital growth
Indian REITs have delivered a dual return profile of steady income and capital appreciation. Since listing, unit prices of the initial four REITs have risen between 25% and 61%, while Knowledge Realty Trust has already gained about 12%.
“The Q2 FY26 performance highlights a resilient total-return proposition despite interest rate volatility,” Shobhit Agarwal, CEO of ANAROCK Capital, said. “This capital growth is complemented by stable distribution yields in the 5.1 to 6% range, which continue to attract income-focused investors.”
In the second quarter of FY26 alone, the five REITs distributed over ₹2,331 crore, nearly 70% higher year-on-year, driven by higher occupancies, new asset additions and the impact of the latest listing. Over the past five years, Indian REITs have delivered an annualised price return of approximately 8.9%, outperforming their peers in Singapore, Japan, and Hong Kong, he said.
Operationally, portfolios are running at near-optimal levels, with committed occupancies of 90–96%, and the sector accounts for over a fifth of India’s gross office leasing in the quarter.
The report highlighted strong operating fundamentals across India’s listed REITs, with re-leasing spreads in the range of 20–36% and a mark-to-market upside of about 15–24% on in-place rents, providing clear visibility for net operating income growth over the next three to four years. It also noted that the sector is backed by fortress balance sheets, as all five REITs carry AAA ratings from CRISIL and maintain conservative leverage, with loan-to-value ratios ranging from 18% to 31%, reflecting prudent financial management and balance sheet strength.
Also Read: SMREIT market likely to exceed $75 bn, driven by 500 mn sq ft of eligible commercial assets: CBRE
Regulatory tailwinds ahead
A major catalyst on the horizon is SEBI’s move to reclassify REIT units as equity-related instruments from January 1, 2026. The change is expected to pave the way for index inclusion and allow mutual funds to raise allocations to REITs, potentially unlocking a broader pool of domestic capital.
“With this reclassification, REITs are set to move from being viewed as high-yield alternatives to becoming core equity portfolio components,” Singh said, adding that the sector could cross a $20 billion market capitalisation in the near term.
With conservative leverage, AAA credit ratings and long-lease assets anchored by blue-chip tenants, analysts say India’s REIT platform is increasingly emerging as a structural pillar of the country’s real estate ecosystem, offering investors a blend of stability, income, and long-term growth.
