India’s REIT Market Crosses ₹1.66 Lakh Crore, Overtakes Hong Kong on Strong Returns and Yields

India’s Real Estate Investment Trust (REIT) market has grown rapidly to become one of the fastest-expanding listed real estate platforms in Asia. In just 6 years since the first REIT listing, India has overtaken Hong Kong in REIT market capitalisation.

Market Size and Asset Base

According to an ANAROCK Capital report, the combined market capitalisation of India’s 5 listed REITs stood at around ₹1.66 lakh crore as of September 30, 2025. Their gross asset value (GAV) has grown to nearly ₹2.3 lakh crore.

This growth has come despite the fact that only about 32% of REIT-ready commercial real estate in India has been listed so far, indicating strong potential for future expansion.

Portfolio Expansion and New Listings

After the August 2025 listing of Knowledge Realty Trust, Indian REITs now control about 176 million sq ft of Grade-A office and retail space, along with hospitality assets of over 2,000 hotel keys.

Strong Returns for Investors

Indian REITs have delivered strong price performance. Over the past 5 years, REIT indices have generated an annualised return of about 8.9%, outperforming REIT markets in Singapore, Japan and Hong Kong.

Since listing, unit prices of the first 4 REITs have risen between 25% and 61%, while Knowledge Realty Trust has already gained around 12%.

Stable Income and Healthy Yields

Income payouts have also improved. Distributions in Q2 FY26 rose nearly 70% year-on-year to ₹2,331 crore, supported by higher occupancies, new assets and the latest REIT listing.

Distribution yields have remained stable between 5.1% and 6.0%, making REITs attractive for investors seeking regular income.

Strong Operations and Balance Sheets

REIT portfolios continue to show high occupancy levels of 90–96%, with re-leasing spreads of 20–36%. All 5 listed REITs hold AAA credit ratings, maintain low leverage of 18–31%, and have average borrowing costs of around 7.5%.

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Regulatory Push to Boost Growth

A major trigger ahead is SEBI’s decision to classify REIT units as equity-related instruments from January 1, 2026. This change is expected to allow index inclusion and increase mutual fund participation, bringing more domestic capital into the sector.

Conclusion

With rising market size, strong returns, stable income and supportive regulation, India’s REIT market is entering a new growth phase. As more assets get listed, REITs are steadily emerging as a mainstream investment option for long-term investors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.