New Delhi, Sep 12 (NationPress) The Indian real estate investment trust (REIT) sector, currently valued at approximately $18 billion as of August 2025, is anticipated to escalate to $25 billion within the next four years, marking an impressive 38 percent increase, according to a recent report.

Since its inception in 2019, the Indian REIT market has exhibited steady growth, with expectations of three additional REITs launching in the upcoming four years.

According to a joint report by Anarock Capital and the Real Estate Developers' Association of India (CREDAI), the appealing yields of 6-7 percent, along with opportunities for rental increases and capital appreciation, render Indian REITs more competitive than their global counterparts.

The combination of regulatory confidence, market depth, and growth potential signifies that India's REITs will play a pivotal role in the evolution of the country's real estate landscape.

“While Indian REITs may have entered the market later than their global peers, they now take the lead. India's robust fundamentals, with distribution yields averaging 6-7 percent, surpass many established markets including the US and Singapore,” noted Shobhit Agarwal, CEO of Anarock Capital.

Indian REITs' average distribution yields not only compete with fixed-income instruments but also possess the potential for substantial capital appreciation. “We explore this phenomenon in detail in the report,” Agarwal added.

Despite the introduction of REIT guidelines in 2014 and the first listing happening in 2019, the Indian REIT market currently constitutes merely 20 percent of institutional real estate, in stark contrast to the US (96 percent) and even Asian counterparts like Singapore (55 percent) and Japan (51 percent).

This limited market penetration can be attributed to the concentration of Indian REITs in 'Grade A' commercial office properties, which provide scale, transparency, and consistent cash flows.

As the market matures, diversification is expected to occur through the introduction of data centers and logistics REITs, spurred by increasing digital demand and the growth of e-commerce, while retail mall REITs may follow suit amid ongoing consolidation, the report indicated.

With more asset classes becoming eligible for REIT status, India's share could rise to 25-30 percent of institutional real estate by 2030, positioning it as one of the world's fastest-growing REIT markets.

“Currently, over 60 percent of India’s REIT market value is concentrated among a small number of players, predominantly in Grade A offices linked to the IT and BFSI sectors,” stated Shekhar Patel, President of CREDAI.

However, the future holds even greater potential. As urban areas expand, infrastructure improves, and the economy diversifies, REITs are expected to broaden their scope into retail, logistics, housing, and innovative asset classes, Patel added.

The report also emphasized that worldwide, industrial REITs are experiencing significant growth due to sustained e-commerce adoption, supply chain optimization, and last-mile logistics demand, which promises long-term rental growth and capital appreciation.

Data center REITs, currently valued at $250 billion by 2024 and projected to double within seven years, are rapidly evolving in response to increasing cloud usage, AI workloads, and hyperscale infrastructure needs.

India is poised to reflect this trend, as evidenced by a 60 percent year-on-year increase in industrial and logistics leasing in the first half of 2025, a 30 percent year-on-year growth in warehousing absorption, and a tripling of institutional investment to $2.5 billion in 2024, according to the report.