September 13, 2025
India’s Real Estate Investment Trust (REIT) sector is gaining strong momentum, offering average distribution yields of 6 to 7.5%, well above returns in developed REIT markets such as the US, Singapore, and Japan. A joint study by CREDAI and ANAROCK highlights that the market, which currently stands at around USD 18 billion, could expand to USD 25 billion by 2030 if growth trends continue.
Why Indian REITs Are Attracting Attention
Since the first REIT listings in 2019, the segment has grown steadily, anchored by demand for Grade A office spaces from IT and BFSI occupiers. Business Today noted that three more REITs are expected to list within the next four years, further boosting the sector’s market capitalisation.
At present, Indian REITs are delivering yields in the 6-7.5% range, compared with just 2.5-3.5% in the US, 5-6% in Singapore, and 4.5-5.5% in Japan. Hindustan Times recently reported that this return profile makes them especially attractive for investors seeking stability along with higher income streams than traditional fixed-income products.
Expanding Beyond Offices
While the current REIT portfolio is dominated by commercial office assets, newer asset classes are coming into focus. Warehousing and logistics leasing surged in the first half of 2025, while absorption levels in industrial parks climbed nearly 30% year-on-year. Data centres are also emerging as a strong candidate for REIT structures, given India’s growing digital infrastructure needs. According to the CREDAI-ANAROCK study, institutional investments in industrial and logistics assets touched about USD 2.5 billion in 2024, paving the way for more diversified REIT listings.
Challenges That Remain
Despite strong momentum, REITs still account for only 20% of institutional real estate in India, compared to nearly 96% in the US and over 50% in Singapore and Japan. The sector’s heavy reliance on office assets also poses concentration risks, while tax treatment of dividends and capital gains is considered less favourable than in some competing markets.
The Road Ahead
Analysts believe that with regulatory reforms, increasing investor participation, and expansion into logistics, retail, and data centres, India’s REIT market can comfortably cross the USD 25 billion mark by 2030. Business Today emphasized that strong rental escalations and high occupancy in premium offices will help keep yields stable in the current 6-7.5% band.
For investors, this means REITs are evolving into a compelling opportunity-offering a balance of high yield, potential for capital appreciation, and a chance to participate in India’s urban growth story.
