India’s REIT market achieves landmark milestone in 2025

India’s Real Estate Investment Trusts (REIT) market has achieved a landmark milestone in FY 2025, crossing the Rs1 trillion market capitalisation threshold, according to JLL’s ‘Emerging Horizons - Analysing Real Estate Investment Trusts (REIT) Performance in India’s Evolving Real Estate Market’ report.

This milestone achievement in just six years signals the start of an exceptional period of growth ahead, with the REIT sector positioned for an additional Rs10.8 trillion ($122-125 billion) expansion opportunity across office and retail sectors in just India’s top seven cities by 2029.

Indian REIT market has achieved remarkable expansion over six years, with market capitalisation growing from Rs264 billion ($3.1 billion) in FY 2020 to Rs1.6 trillion ($19 billion) as of Sept.30th, 2025.

The sector has evolved from a single REIT managing 33 million sq ft in 2019 to five listed REITs collectively controlling 174 million sq ft of leasable office and retail space, highlighting its robust growth trajectory. “India’s five REITs have approximately Rs230 billion in available borrowing capacity considering a conservative 35 per cent of the market value. This gives them significant firepower to acquire premium properties and expand their portfolios,” said Lata Pillai, Senior Managing Director & Head of Capital Markets, India, JLL.

Distribution yields across these REITs have ranged between 6 per cent to 7 per cent during FY2025. The overall steady distributions trend continues in H1 FY2026 across all three REITs suggesting that high-quality office buildings in the key cities continue to deliver stable and predictable cash flow for investors. Strong leasing fundamentals were evident with combined occupancy rates of office REITs reaching 91 per cent as of September 2025 of all four office REITs. Since its public listing in FY 2024, Nexus too has delivered value creation, achieving 10 per cent CAGR in GAV growth as of H1 FY 2026.

The office sector has been the mainstay of Indian REITs so far with the REITs’ share in the total Grade A office stock across India’s top seven cities showing a dramatic growth from just 4.2 per cent in 2019 to approximately 15 per cent as of June 2025.

The sector has witnessed remarkable institutional adoption, with Embassy REIT demonstrating the most dramatic shift from 70 per cent sponsor holdings to just 8 per cent, while institutional ownership surged to 75 per cent. This transformation reflects institutional investors’ increasing comfort with Indian REITs as an asset class. Also, Nexus Select Trust shows rapid institutional uptake from 17 per cent to 36 per cent within just one year, while retail participation remained robust at 42 per cent.

 The sector received a significant boost in September SEBI reclassified REITs as equity instruments, aligning with global practices. This strategic move enables REIT inclusion in equity market indices while facilitating increased mutual fund allocations and expanding institutional investor access. The REIT market presents exceptional sector-wise expansion opportunities across multiple real estate segments.

The office sector alone leads with high-quality assets representing an additional market opportunity valued at Rs5.9 trillion ($66.6-68.7 billion), offering potential 4X growth for office REITs.

Additionally, retail segment provides substantial diversification potential with opportunities across India’s top seven cities valued at Rs2.8 trillion ($32-33 billion). Future development pipeline adds another growth dimension through 70 million sq ft of under-construction and planned supply with institutional participation, valued at Rs2.1 trillion ($23 billion).

The Indian REIT market is positioned for exponential growth, with the current market capitalisation of INR 1.6 trillion representing just the beginning of a much larger opportunity.

The convergence of institutional capital, regulatory support and substantial asset pipeline positions India’s REIT market for exponential growth over the next 5-7 years, making strategic positioning critical for market leadership.

I have inherited family assets and my brother does not want a share in the property. How we do ensure legal formalities to inherit the property. Avinash K Rana, Sharjah.

Your brother will have to execute a release deed or a settlement deed in your favour.

The legal document is of course subject to stamp duty and registration charges. You can also apply for a legal heir certificate and the tehsildar, after conducting an enquiry will issue a certificate mentioning the names of legal heirs who succeeded to the estate.

With your brother’s release deed and legal heir certificate, you are in a legally sound position to either retain or sell the property at any stage.

I hold three residential properties jointly with my wife and we intend selling two of them to reinvest in a bigger flat. Please suggest how to minimise capital gains tax? Prakash Rangarai, Dubai.

Assuming both of you have undivided rights, long-term capital gains will be payable if they are held for a period of two years or more. The liability will depend upon the ratio of individual holding. Each one of you will have to individually compute the liability. The liability for payment of long-term capital gains tax. You can reinvest in a new property availing the deduction and complying with the stipulations under section 54.