Indian REITs look to grow a 'long tail' after office outing

Bengaluru: India’s real estate investment trusts (REITs) are broadening their horizons beyond offices into malls, warehouses, residential and data centres.

With more than 130 million sq ft already listed and another 371 million sq ft of office stock in the pipeline that can be brought under REITs, the market is entering a phase of growth led by asset diversification, strong retail participation and expansion into markets beyond metros and other big cities.

India’s REIT market is steadily maturing, moving into what analysts describe as its “long-tail” phase, where growth comes not just from scale but from diversification across assets and geographies.


Since the country’s first listing in 2019, REITs have grown to now represent around 16% of India’s Grade-A office stock.

Occupancies remain healthy above 86%, with weighted average lease expiries of seven-eight years. Dividend yields during FY25 stood in the 5–7% range, as listed REITs distributed a combined ₹6,070 crore to investors, marking 13% year-on-year growth. Net operating income climbed 16% to ₹89,100 crore, underlining the resilience of the vehicle even amid global volatility.

“India’s REIT journey, which began just six years ago, has reached an inflection point. The long-tail expansion into newer asset classes and tier-2 markets will define the next decade of growth,” said Badal Yagnik, chief executive officer at real estate services provider Colliers India. Investors are increasingly seeking exposure to high-yielding and resilient assets such as logistics parks, malls and data centres, aligning India’s REIT portfolios with global best practices, he said.

The office sector remains the backbone, but diversification is clearly the next chapter. The launch of India’s first retail-focused Nexus Select Trust in 2023, followed by the warehousing-led NDR InvIT in 2024, marked turning points.

“The diversification signalled a move away from the nearly 80% concentration in offices towards a more balanced model resembling global markets such as the US and Singapore, where no single asset class dominates,” said Amrutesh Reddy, director, NDR InvIT Managers, the first perpetual infrastructure investment trust.

REITs like Embassy REIT, Brookfield India Real Estate Trust and Mindspace REIT see the shift as a natural evolution. There is opportunity ahead in building a diversified asset class that mirrors India’s urban growth story. From consumption-led retail to warehouses and digital infrastructure like data centres, this diversification could broaden investor appeal, increase yield stability, and reflect the broader dynamics of India’s urban expansion,” Embassy REIT CEO Amit Shetty said.

Experts believes India's REIT market, though still nascent compared to global counterparts like the US (over 200 REITs) and Singapore (about 40 REITs), is on an upward trajectory. In just a few years, the country’s five listed REITs have crossed a combined market capitalisation of about ₹1.5 lakh crore, while delivering stable and predictable returns.

“This performance has brought formalisation, transparency and financial discipline to commercial real estate, attracting institutional investors and broadening access for retail participants. As the ecosystem evolves, diversification across sectors and cities will define the next phase of growth, steadily positioning REITs as a mainstream asset class in India and a critical bridge between physical real estate and financial markets,” said Alok Aggarwal, chairman of the Indian REIT Association and managing direct and CEO at Brookfield India Real Estate Trust.

“Global investors today want portfolios that are diversified, sustainable, and future-ready,” said Ramesh Nair, MD and CEO at Mindspace REIT. “In India, diversifying into malls, warehouses, residential and data centres is more than just expansion; it’s a smart shift. These assets strengthen stability, attract new investors, and secure long-term returns in a fast-changing real estate market.”

The long-tail story is also geographical. While tier-I metros dominate existing REITs, secondary cities are emerging as the next frontier. Over 10 million sq ft of real estate across Ahmedabad, Indore and Mangaluru is already part of listed trusts. Demand from global capability centres, coupled with the rise of organised retail, is expected to accelerate REIT participation in these markets. Residential formats such as student housing, senior living and co-living are also tipped to evolve into REIT-ready segments over the coming years, supported by urban migration and demographic shifts.

Market experts say this expansion is inevitable. India’s REIT market is still young compared to the US or Singapore, but the direction is clear. Diversification across sectors and cities will define the next phase, making REITs a mainstream asset class for both institutions and retail investors.