NEW DELHI– India’s real estate investment trust sector has grown from a policy experiment into a mainstream asset class, with gross asset value touching about Rs 2.3 lakh crore and market capitalization now exceeding that of Hong Kong, according to a new report released Monday.
The report said India’s REIT equity market capitalization stood at around Rs 1.66 lakh crore as of September 30, 2025, overtaking Hong Kong’s REIT market despite only about 32 percent of India’s REIT-eligible real estate stock being listed.
Indian REITs have also delivered strong returns. The five-year annualized price return for Indian REIT indices was over 8.9 percent, outperforming counterparts in Singapore, Japan, and Hong Kong, many of which recorded negative or low single-digit returns over the same period.
The report highlighted the sector’s resilience, noting that REIT performance has remained robust despite interest rate hikes and broader market volatility.
Since listing, unit prices of the first four Indian REITs have risen between 25 percent and 61 percent, while the most recently listed REIT has already gained around 12 percent.
Strong unit price appreciation, combined with stable income generation, has pushed trailing 12-month distribution yields into an attractive 5.1 to 6 percent range. The five listed REITs together distributed more than Rs 2,331 crore in the second quarter of FY26, marking a sharp 70 percent year-on-year increase.
The report said the sector is on track to cross a $20 billion market capitalization in the near term, driven by potential index inclusion and rising domestic investor participation.
Mandatory distribution rules, which require REITs to pay out at least 90 percent of net distributable cash flows, have positioned them as efficient yield vehicles, broadening access to Grade-A commercial real estate for both high-net-worth and retail investors.
Operationally, REIT portfolios remain near optimal utilization, with committed occupancy levels ranging from 90 to 96 percent. During the second quarter of FY26, the sector accounted for more than 20 percent of total gross office leasing across India. (Source: IANS)
