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With three new REITs expected over the next four years, the sector is projected to cross $25 billion by 2030.
The distribution yields, currently averaging at 6-7 per cent, are well above many mature markets such as the US and Singapore.
Indian Real Estate Investment Trusts (REITs) are offering average distribution yields of 6-7 per cent, higher than those in several mature markets, according to a report by ANAROCK Capital and CREDAI unveiled at the CREDAI NATCON in Singapore.
The report, titled ‘Indian REITs: A Gateway to Institutional Real Estate’, said India’s REIT market, though relatively young, has grown to a market capitalisation of around $18 billion as of August 2025. With three new REITs expected over the next four years, the sector is projected to cross $25 billion by 2030.
‘Distribution Yields Well Above Many Mature Markets Like US and Singapore’
“Indian REITs are late to the party, but now lead the dance,” said Shobhit Agarwal, CEO of ANAROCK Capital. “The distribution yields, currently averaging at 6-7 per cent, are well above many mature markets such as the US and Singapore. They are competitive with fixed-income instruments but carry the added potential for capital appreciation.”
Despite the attractive yields, the sector’s diversification remains limited compared to global peers. Over 60 per cent of India’s REIT market is concentrated in Grade A office assets, largely linked to IT and BFSI occupiers. In contrast, markets like the US, Singapore and Japan have well-established REITs in retail, industrial, and specialised segments such as data centres.
Market Share Still Low
REITs in India account for about 20 per cent of the institutional real estate market, far lower than the US (96 per cent), Singapore (55 per cent) and Japan (51 per cent). Out of nearly 520 million sqft of REITable office stock across India’s top seven cities, only about 166 million sqft — or 32 per cent — has been listed.
Industry players expect this penetration to rise to 25-30 per cent by 2030 as new asset classes such as logistics, retail and data centres come into play. “As India’s cities grow, infrastructure strengthens, and the economy diversifies, REITs will expand into retail, logistics, housing, and new-age assets,” said Shekhar Patel, president of CREDAI.
Data Centres, Logistics in Focus
Globally, industrial and data centre REITs are expanding rapidly, driven by e-commerce penetration and rising cloud adoption. Data centre REITs, valued at $250 billion in 2024, are projected to double within seven years. India is seen mirroring this trend, with industrial and logistics leasing surging 60 per cent year-on-year in H1 2025, warehousing absorption rising 30 per cent, and institutional investment in the segment tripling to $2.5 billion in 2024.
Regulatory Push
Progressive reforms have helped strengthen investor confidence in Indian REITs. Since SEBI’s introduction of REIT regulations in 2014, changes such as the reduction in lot sizes, simplified capital gains, and dividend tax exemptions (introduced in 2025) have boosted transparency and retail participation.
However, taxation remains a differentiator with mature markets. While dividends from REITs are generally taxed at lower rates in the US and Singapore, Indian REIT distributions are taxed at individual slab rates, slightly dampening their appeal for small investors.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
September 12, 2025, 17:17 IST
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