A new report forecasts India’s REIT market capitalization soaring to $25 billion by 2030, up from current levels of approximately $7 billion. This ambitious outlook underscores the sector’s maturation and its emergence as a cornerstone of alternative investments.
Historically, Indian real estate was plagued by illiquidity and opacity. REITs have disrupted this by offering fractional ownership in income-producing properties. Since the pioneering Embassy REIT IPO in 2019, which raised $750 million, subsequent offerings have validated the model. Today, four REITs dominate, with a portfolio spanning 100 million sq ft across top-tier cities.
Growth catalysts are multifaceted. Robust demand for premium workspaces persists, with net leasing at 45-50 million sq ft annually. The hybrid work model’s permanence hasn’t dented occupancies, hovering at 85-90%. Meanwhile, retail REITs like Nexus are thriving post-pandemic, with consumption-led recovery.
Institutionalization is accelerating inflows. EPFO, sovereign wealth funds, and family offices are ramping up allocations, eyeing inflation-hedged returns. Tax efficiency—pass-through status on dividends—sweetens the deal.
Challenges persist: navigating GST on construction, ensuring diversified tenant bases, and managing capex for ESG upgrades. Nonetheless, innovations like small-and-medium REITs (SM REITs) will democratize access to Tier-2 city assets.
In conclusion, hitting $25 billion by 2030 would position India among global REIT leaders, fostering a virtuous cycle of development, employment, and wealth creation in the real estate ecosystem.