India’s REIT market grew 6-fo
The growth has been driven by new listings as well as steady unit price appreciation among existing Reits, four of which have recorded year-on-year (YoY) unit price growth of more than 20 per cent between Q3FY25 and Q3FY26.
“India’s REIT market has delivered consistent returns to investors through the volatile global cycle,” said Anshuman Magazine, president and chief executive officer (CEO), India, South-East Asia, Middle East and Africa at CBRE.
According to the Securities and Exchange Board of India (SEBI), REITs are mandated to be listed on a stock exchange and distribute at least 90 percent of their taxable income. REITs distribute returns which can be in the form of dividends, interest, amortization of loans received from special purpose vehicles, other income, or a combination of these above mentioned aspects. India’s five publicly listed REITs are Brookfield India Real Estate Trust, Embassy Office Parks Reit, Knowledge Realty Trust (KRT), Mindspace Business Parks Reit and Nexus Select Trust. The fifth Reit, KRT, was listed on August 18, 2025.
The report highlights three regulatory changes expected to support wider adoption of REITs, including SEBI’s decision to reclassify REITs as equity-related instruments from January 2026, which is expected to improve liquidity by enabling wider participation from mutual funds and special investment funds that were previously restricted by hybrid investment limits.
The regulatory change enables broader participation from mutual funds and specialized investment funds (SIFs), which were historically hindered by hybrid instrument limitations.
The sector may also benefit from the Reserve Bank of India (RBI) proposal to allow commercial banks to lend directly to REITs, aligning the framework with infrastructure investment trusts (InvITs).
“This reconciliation with the existing InvIT framework is expected to rationalize borrowing costs, which previously largely depended on bond markets, thereby enhancing balance sheet flexibility and leading to distributable cash flow growth,” the report said.
Additionally, the Union Budget 2026-27 has outlined a plan to monetize central public sector enterprise (CPSE) assets through dedicated REIT structures, potentially unlocking value from state-owned commercial real estate and giving investors access to sovereign-backed assets.
“As the regulatory framework evolves to enable broader equity market participation and reduce the cost of capital for REIT platforms, we expect the pace of portfolio expansion and new listings to accelerate,” said Rami Kaushal, managing director of advisory and valuation services for India, the Middle East and Africa at CBRE.
The report said the small and medium Reits (SM Reits) segment could add another layer of maturity to the market, which could potentially exceed $75 billion, supported by over 500 million square feet of eligible office, logistics and retail properties.
CBRE’s investor intent survey also found that office-sector REITs, the primary asset class in India, is the most preferred segment for capital allocation, with about 42 per cent of India-based respondents indicating willingness to invest.
