India’s operational office stock offers future REIT listings worth $61 billion

Indian commercial real estate offers rent-yielding Grade A offices spread over 393.7 million sq ft assets that can be listed through a Real Estate Investment Trust (REIT) or REITable assets worth over $61 billion across the top seven cities, showed data from JLL India.

So far, India has witnessed the listing of three office asset-based REITs, garnering a robust response from institutional and retail investors since 2019.

The listing of REITs in the country has introduced a real estate investment option akin to mutual funds. The sustained growth of India's office market, coupled with the enhanced transparency fostered by REIT implementation, has created an environment conducive for large financial institutions to participate in these listings.


“Retail and hotels have experienced robust demand following the pandemic, resulting in revised asset pricing. Warehousing has also witnessed significant growth in recent years, with global funds aggregating these assets through platforms. The listing of these asset portfolios through REITs represents the next logical step,” said Lata Pillai, Senior Managing Director & Head of Capital Markets, India, JLL.

According to her, the Indian real estate market is expected to witness further REIT listings of alternative asset classes, while the office sector will continue to see steady growth in REIT listings.

“India’s office segment has been the sweet spot for global investors due to strong demand growth coupled with lower vacancy levels and rising rentals. Institutional investments in office space stood at $28 billion during 2005-22, accounting for a 42% share of the total investments across all real estate segments,” said Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.

India’s first three REIT listings comprised primarily office assets. Bengaluru leads the office space with 32% share, followed by Delhi NCR at 15% and Mumbai at 14%. The potential REIT stock has been assessed based on the asset size and quality, ownership pattern and occupancy levels.

The office spaces managed by REITs have experienced significant growth, expanding three-fold from 24.8 million sq ft as of March 2019, to 74.4 million sq ft as of March 2023. The revenues of REITs have seen a significant increase due to their ability to raise portfolio lease rentals, which have grown at a CAGR of 5.5% over the past three years, compared to 2% for comparable non-listed assets.