Indian REITs outperform global peers with 6–7% yields, market reaches $18 bn: Report

Since the first listing in 2019, Indian Real Estate Investment Trusts (REITs) have steadily gained ground, reaching a market capitalization of about $18 billion as of August 2025. According to the latest report, Indian REITs: A Gateway to Institutional Real Estate, the sector is projected to surpass $25 billion by 2030. Despite being a late entrant compared to global peers, Indian REITs now stand out with distribution yields of 6–7%, significantly higher than those in the US, Singapore, and other mature markets. “Indian REITs are late to the party, but now lead the dance,” said Shobhit Agarwal, CEO – ANAROCK Capital. “These yields are competitive with fixed-income instruments while also offering capital appreciation.”

 REITs or real estate investment trust can be described as a company that owns and operates real estates to generate income. Currently, India’s REIT market accounts for just 20% of institutional real estate, far behind the US (96%) and Asian peers like Singapore (55%) and Japan (51%). Much of the activity remains concentrated in Grade A office assets, particularly linked to IT and BFSI occupiers. However, with infrastructure expansion and diversification of the economy, REITs are expected to spread into logistics, retail, housing, and even new-age assets such as data centres.

Shekhar Patel, President – CREDAI, noted, “Over 60% of today’s REIT value rests with a few large office players. The future holds wider promise as India’s urban growth unlocks opportunities across asset classes, making the country one of the most dynamic REIT markets globally.”

Globally, industrial and data centre REITs are seeing strong momentum, driven by e-commerce growth, supply chain optimization, and rising digital demand. Data centre REITs alone, valued at ~USD 250 billion in 2024, are projected to double within seven years. India is positioned to mirror this trend, with 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.

Of 520 million sq. ft. of REIT-worthy office stock across India’s top seven cities, only 166 million sq. ft. (32%) is currently listed. This highlights the sector’s significant headroom for growth. With broader asset diversification, India’s REIT penetration could rise to 25–30% of institutional real estate by 2030.

Regulatory reforms have also bolstered investor confidence. Since SEBI’s introduction of REIT regulations in 2014, measures such as reduced lot sizes, simplified capital gains rules, and dividend tax exemptions (introduced in 2025) have deepened transparency and retail participation. While developed markets often enjoy lower dividend taxation, India’s recent reforms are seen as a step toward greater competitiveness.

Indian REITs combine strong yields, capital appreciation prospects, and regulatory support. As they diversify beyond offices into logistics, retail, and data centres, India’s favourable demographics, rapid urbanization, and robust GDP growth will reinforce its position as a high-potential destination for institutional capital.