India’s Real Estate Investment Trusts (REITs) are fast emerging as a game-changer in the commercial property market. According to Colliers’ latest report, “REITs Unlocked: Accelerating India’s Real Estate Maturity,” the penetration of REITs in the Grade A office market is expected to rise significantly—from the current 16% to nearly 25–30% by 2030.
Current Footprint and Growth Potential
At present, India’s four listed office REITs collectively manage 133 million sq. ft. of Grade A office space. However, the growth runway is massive—another 371 million sq. ft. (46% of existing stock) has the potential to be listed under future REITs.
The rise is being fueled by:
- Growing demand from Global Capability Centres (GCCs)
- A broader occupier base
- Increasing institutionalisation of real estate
City-Wise Distribution
The report highlights how Bengaluru leads the charge, accounting for 24% of future REIT-able stock, followed by Hyderabad at 19%.
Additionally, existing REITs are actively expanding. Around 34 million sq. ft. of under-construction office space is expected to become operational in the next 12–24 months, further boosting supply.
Market Dynamics and Occupancy Trends
Strong demand is evident in occupancy rates, which are currently above 86%. This demand is being driven primarily by:
- GCCs
- Technology firms
- Banking, Financial Services, and Insurance (BFSI) companies
Interestingly, about 60% of REIT-able stock (223 million sq. ft.) is concentrated in secondary business districts across India’s top seven cities.
Sustainability Push
India’s REITs are also setting benchmarks in sustainability. Nearly 86% of operational REIT office portfolios are green-certified, and the target is to achieve 100% certification in the near future. Additionally, REITs plan to increase renewable energy usage by 30–35%, aligning with global ESG goals.
A More Mature Real Estate Market
With rising institutional participation, new listings, and a focus on sustainable growth, India’s office REITs are well on their way to transforming the real estate sector. By 2030, nearly one-third of Grade A office space could be under REITs, making the market more transparent, liquid, and investor-friendly.
