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ndia’s REIT sector reached a landmark in 2025 with its fifth listing, a milestone that has drawn renewed attention to the market. Globally, the United States leads with 196 REITs and a $1.4 trillion market cap, followed by Japan (57), Singapore (39), Australia (32), and Hong Kong (11). India now has five REITs—Embassy Office, Parks, Mindspace, Business Parks, Brookfield India, Nexus Select Trust, and Knowledge Trust—worth roughly ₹18 billion.

    REITs are structured as SPVs that own, manage, or finance income‑generating properties such as offices, malls, and warehouses. In 2024, the holding period for capital gains was shortened from 36 to 12 months, and in 2025 SEBI officially reclassified REITs as equities, a change effective from January 2026. This reclassification is expected to unlock institutional capital, as mutual funds currently allocate less than 1 % of assets to REITs, despite the sector’s 80 trillion‑rupee size.

    Tax incentives also support the asset class: dividends and rental income are exempt for investors if the underlying SPV pays corporate tax. Performance metrics are attractive—distribution yields of 6–7 %, capital appreciation of 3–5 %, and vacancy rates between 10–16 %. By October 2025, 23 million square feet of new office space were under construction, with Global Capability Centers accounting for 28–29 % of gross leasing, reinforcing India’s status as a global office hub. The market is projected to exceed $30 billion in the coming years.

    Small and medium REITs have begun to emerge, offering fractional ownership between ₹50 and ₹500 crore. CBR estimates this segment could surpass $75 billion, covering 500 million square feet of commercial assets across offices, retail, and logistics. The key question now is the pace at which this market will expand.