India’s REIT Market Tops ₹1.66 Lakh Crore, Overtakes Hong Kong as Returns, Yields and Listings Surge

India’s Real Estate Investment Trust (REIT) market has emerged as one of Asia’s fastest-scaling listed real estate platforms, surpassing Hong Kong in market capitalization within just six years of its first listing.

According to ANAROCK Capital’s report India REITs – Taking a Stride, the combined equity market capitalization of India’s five listed REITs stood at around Rs 1.66 lakh crore as of September 30, 2025, while gross asset value (GAV) has expanded to nearly Rs 2.3 lakh crore.

The milestone is particularly notable given that only about 32% of India’s REIT-eligible commercial real estate stock has been listed so far, highlighting significant headroom for future growth. With the August 2025 listing of Knowledge Realty Trust, the sector now controls nearly 176 million sq ft of Grade-A office and retail space, along with a hospitality portfolio exceeding 2,000 keys.

Performance metrics underline the sector’s growing investor appeal. Indian REIT indices have delivered a five-year annualised price return of about 8.9%, decisively outperforming peers in Singapore, Japan and Hong Kong, where returns have remained muted or negative. Since listing, unit prices of the first four REITs have risen between 25% and 61%, while Knowledge Realty Trust has already gained around 12%.

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Income visibility has strengthened in tandem. Distributions in Q2 FY26 jumped nearly 70% year-on-year to Rs 2,331 crore, driven by higher occupancies, new asset additions and the latest listing. Trailing distribution yields have remained steady in the 5.1–6.0% range, reinforcing REITs’ positioning as stable yield instruments.

Operationally, portfolios continue to run at high efficiency, with committed occupancies ranging between 90% and 96% and re-leasing spreads of 20–36%. Strong balance sheets further support the outlook, with all five REITs carrying AAA credit ratings, conservative leverage of 18–31% and average borrowing costs of about 7.5%.

A key catalyst ahead is regulatory. SEBI’s decision to reclassify REIT units as equity-related instruments from January 1, 2026, is expected to enable index inclusion and widen mutual fund participation. As domestic capital deepens and more assets come to market, India’s REIT sector appears poised for its next phase of expansion, cementing its place as a mainstream equity asset class.