Indian Real Estate Investment Trusts (REITs) are demonstrating strong performance, providing yields of 6-7% that surpass those of many global markets. This competitive edge, combined with the potential for capital appreciation, is attracting significant investor interest in the Indian REIT market.

Since the debut of the first Indian REIT in 2019, the market has steadily expanded, reaching a capitalization of approximately USD 18 billion by August 2025. Projections indicate continued growth, with analysts forecasting the sector to exceed USD 25 billion within the next four years. This growth trajectory is supported by robust fundamentals, increasing foreign investment, and rising demand for premium office spaces.

Compared to mature global markets like the US and Singapore, where REITs have a longer history and are more diversified across asset classes, India's REIT market is still evolving. However, its risk-adjusted yields remain attractive, making it a compelling investment option. While globally, Data Center REITs are valued at approximately USD 250 Billion in 2024 and are projected to double within seven years, India is also mirroring this trend with a 60% year-over-year surge in industrial and logistics leasing in the first half of 2025, a 30% year-over-year rise in warehousing absorption, and a threefold jump in institutional investment to USD 2.5 billion in 2024.

Occupancy rates across Indian REITs remain strong, reflecting the overall health of the Grade A office market. Mindspace REIT, for example, reported a 91.2% occupancy rate in FY2025, demonstrating strong tenant retention and leasing demand. Embassy REIT maintains a steady occupancy between 85% and 87%, supported by a diversified base of Fortune 500 tenants, while Brookfield India REIT recorded 88% occupancy, indicating improving demand momentum.

Global Capability Centers (GCCs) are a key driver of leasing demand in REIT-owned properties, accounting for a significant portion of total leasing activity. This preference for institutional-grade office spaces offered by REITs is contributing to the sector's strong performance.

Looking ahead, the Indian REIT market is expected to diversify into other asset classes, including retail, logistics, housing, and data centers. This expansion will unlock further opportunities for investors and solidify India's position as one of the most dynamic REIT markets globally. While REITs currently represent just 20% of India's institutional real estate market, there is potential for significant growth, with projections of reaching 25-30% by 2030.

The growth of the Indian REIT market is further supported by government initiatives such as the National Infrastructure Pipeline and Production Linked Incentive schemes, which are boosting infrastructure spending and manufacturing incentives. These factors, combined with a growing economy and increasing urbanization, create a favorable environment for REITs to thrive.