How Did India’s Office REITs Surpass the BSE Realty Index with Over 15% Capital Appreciation?
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Synopsis
Discover how India's office REITs outperformed the BSE Realty Index with remarkable capital appreciation exceeding 15% over the past year. This article delves into the factors driving this growth, including demand from global firms and a shift towards premium assets, making the Indian REIT market a focal point for investors.
Key Takeaways
- India's office REITs achieved over 15% capital appreciation.
- Demand from global capability centres is a key growth driver.
- Occupancy rates for office REITs are nearing 90%.
- Three office REITs manage over 105 million sq. ft. of portfolio.
- Over 23 million sq. ft. of new office space is planned or under construction.
New Delhi, July 17 (NationPress) India’s office real estate investment trust (REIT) sector has outperformed the BSE Realty Index, achieving over 15 percent capital appreciation over the past year (up to June 2025), according to a report released on Thursday.
The primary factor behind this growth is the robust demand from global capability centres (GCCs), engineering and manufacturing sectors, and BFSI firms, which has strengthened India’s office property market. Additionally, there is an increasing trend among tenants favoring premium-grade assets, which has greatly benefited REITs, as noted in Cushman & Wakefield’s ‘Asia REIT Market Insight 2024-25’ report.
In 2024, India’s REIT market experienced significant growth and is anticipated to maintain strong investor interest throughout the year.
The financial year 2024–2025 (ending March 2025) marked a remarkable period for India’s office REITs, with the three office REITs collectively achieving leasing volumes exceeding 16 million square feet, representing nearly one-fifth of the gross leasing volume (GLV) across the top eight cities in the country.
As of June 2025, the Indian REIT landscape included three office REITs and one retail REIT, managing a combined operational portfolio of more than 105 million sq. ft.
Although the count of listed REITs remained constant over the past year, their overall portfolio expanded by over 12 percent, elevating the institutional share to about 13 percent of India’s total Grade A office inventory.
Furthermore, over 23 million sq ft of new office space is currently under construction or planned by existing office REITs, which is expected to contribute to the total REIT portfolio in the forthcoming years, as stated in the report.
India’s office asset REITs have captured a significant portion of demand from GCCs, which is a crucial growth factor for the country’s office markets.
Nationally, GCCs have represented 28 percent–29 percent of gross leasing volume on average over the last four quarters leading up to Q1 2025.
“India’s REIT market is on a strong upward path, with remarkable growth noted in the office sector. Multinational companies, particularly GCCs, have propelled record leasing activities, accounting for a considerable portion of the nation’s Grade A office inventory,” remarked Somy Thomas, Executive Managing Director, Valuations and Co-Head of Capital Markets, India at Cushman & Wakefield.
There has also been an increasing preference among tenants for premium-grade assets, which has considerably benefited REITs. All three office REITs in India achieved occupancy rates nearing 90 percent by the end of Q1 2025, he noted.
The Asia REIT market is set for ongoing evolution as it navigates the dual dynamics of mature market stabilization and the expansion of emerging markets.
Point of View
It is evident that India's office real estate investment trusts (REITs) are on a solid growth trajectory. The strong performance of these REITs reflects the increasing demand from multinational corporations, particularly GCCs. This trend not only highlights the resilience of the Indian market but also positions it as an attractive destination for both domestic and international investors.
NationPress
17/07/2025
Frequently Asked Questions
What is the recent performance of India's office REITs?
India's office REITs have recorded over 15% capital appreciation over the past year, outpacing the BSE Realty Index.
What factors are driving growth in India's office REIT market?
The growth is primarily driven by increased demand from global capability centres, engineering, manufacturing sectors, and a rising preference for premium-grade assets.
How many office REITs are currently operational in India?
As of June 2025, the Indian REIT market comprises three office REITs and one retail REIT.
What occupancy rates are being reported by Indian office REITs?
All three office REITs in India achieved occupancy rates close to 90% by the end of Q1 2025.
What is the future outlook for India's REIT market?
The outlook remains positive, with expectations of continued strong investor interest and new office spaces under construction.
