The findings were unveiled in the report ‘Indian REITS: A Gateway to Institutional Real Estate’, prepared by ANAROCK Capital in partnership with CREDAI. The study takes an in-depth look at India’s REIT journey, its opportunities, and the road ahead.
Shobhit Agarwal, CEO – ANAROCK Capital, noted the rapid strides of the sector and said, “Indian REITs are late to the party, but now lead the dance. Despite its late entry compared to global peers, India has strong fundamentals. The distribution yields, currently averaging at 6-7%, are well above many mature markets such as the US and Singapore among others. Average distribution yields of Indian REITs are competitive with fixed-income instruments but have the added potential for capital appreciation. We take a deep dive into this phenomenon in the report.”
Echoing this optimism, Shekhar Patel, President, CREDAI, said, “Over 60% of India’s REIT market value today rests with a very small set of players, with a strong base in Grade A offices linked to IT and BFSI. The future, however, holds far wider promise. As India’s cities grow, infrastructure strengthens, and the economy diversifies, REITs will expand into retail, logistics, housing, and new-age assets. This transformation will unlock unprecedented opportunities for investors and firmly place India among the most dynamic REIT markets in the world.”
Still Catching Up Globally
While India’s progress is encouraging, its REIT penetration is just 20% of institutional real estate—far below the USA (96%) or even Asian counterparts such as Singapore (55%) and Japan (51%). This is largely because Indian REITs have thus far been concentrated in Grade A commercial office spaces, given their scale, transparency, and steady cash flows.
As the market evolves, analysts expect expansion into data centres, logistics, and retail malls. Data centres, in particular, stand out as global REITs in this space are valued at around USD 250 billion in 2024 and are projected to double in seven years, driven by surging cloud adoption and AI workloads. India appears ready to ride this wave, as seen in a 60% YoY surge in industrial and logistics leasing in H1 2025, a 30% YoY rise in warehousing absorption, and a threefold jump in institutional investment to USD 2.5 billion in 2024.Residential REITs remain a longer-term play due to fragmented ownership and low rental yields, but ANAROCK estimates India’s penetration could climb to 25–30% of institutional real estate by 2030, marking it as one of the world’s fastest-growing REIT markets.
Reforms Fuel Investor Confidence
The regulatory environment has been crucial in building investor trust. Since SEBI’s introduction of REIT guidelines in 2014, reforms such as reduced lot sizes, simplified capital gains structures, and dividend tax exemptions in 2025 have improved transparency and retail participation. However, dividends in mature markets like the USA and Singapore enjoy lower tax rates, which make them comparatively more attractive.
A Market on the Move
Despite such challenges, India’s REIT story is unfolding with strong momentum. Backed by rising institutional-grade stock, robust demand for office space, and an increasingly proactive regulatory setup, REITs are emerging as a mainstream investment class.
With yields of 6–7%, steady rental escalations, and the possibility of capital gains, Indian REITs are offering a compelling case for both domestic and international investors. The diversification into logistics, warehousing, retail, and data centres, supported by rapid urbanization and sustained GDP growth, is set to transform the market’s profile.
The report concludes that REITs will not just provide stable returns but also play a defining role in shaping the future of Indian real estate, ensuring that the sector stands tall among the world’s most dynamic investment destinations.
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