India office REITs bounce back, beat BSE Realty Index with 15% returns on rising GCC demand

India's office Real Estate Investment Trust (REITs) have rebounded strongly, outperforming the BSE Realty Index with over 15% capital appreciation in the 12 months to June 2025. The surge comes after two years of underperformance, driven by renewed leasing demand from global capability centres (GCCs), BFSI, engineering firms, and growing preference for premium-grade office assets, according to Cushman & Wakefield’s Asia REIT Market Insight 2024-25.

The REITs market posted steady growth, driven by strong leasing demand for institutional-grade office space. In FY 2024-25, the country's three office REITs leased over 16 million sq. ft., nearly 20% of the gross leasing volume across the top eight cities, the report says. Indian REITs attracted a large share of demand from GCCs.

The Cushman report, which covers the 5 largest REIT markets in Asia: Japan, Singapore, mainland China, Hong Kong, and India, says India and China's REIT markets saw strong growth in 2024 and are expected to attract continued investor interest.

"India’s REIT market continues to grow, led by demand from multinational companies and preference for premium assets. All three office REITs reached close to 90% occupancy at the end of Q1 2025," said Somy Thomas, Executive Managing Director, Cushman & Wakefield.

As of June 2025, the Indian REIT market had three office and one retail REIT, managing over 105 million sq. ft. of operational space. Their portfolio grew over 12% in the past year, pushing institutional share to 13% of India’s total Grade A office stock. An additional 23 million sq. ft. is under construction or planned.

GCCs accounted for 28-29% of pan-India gross leasing over the last four quarters up to Q1 2025. For office REITs, this share was even higher, at 40-60%, underscoring their growing importance to institutional landlords.

A fourth office REIT is expected to debut by the end of 2025. Knowledge Realty Trust, backed by Blackstone and Sattva Developers, will bring 48 million sq. ft. of Grade A office space (37 million operational and 11 million under development), making it one of the largest in India.

Meanwhile, mainland China's REIT market grew 85% in market value by end-2024, surpassing Hong Kong to become one of Asia's top three. Mature markets like Japan, Singapore, and Hong Kong remained stable.