Office and retail boom could push India’s REIT market to ₹11 lakh crore by 2029: JLL

India’s Real Estate Investment Trust (REIT) market has crossed a major milestone in FY25, surpassing the ₹1 lakh crore market capitalisation mark, and is eyeing an additional ₹11 lakh crore growth opportunity over the next four years across the office and retail sectors, reveals a latest report.

The REIT sector now has a fresh expansion opportunity of ₹10.8 lakh crore ($122–125 billion) across office and retail segments in the country’s top seven cities by 2029, according to JLL’s latest report, “Emerging Horizons – Analyzing REIT Performance in India’s Evolving Real Estate Market.”

In the past six years, the market capitalisation of the Indian REIT market has grown from ₹26,400 crore in FY20 to ₹1.6 lakh crore as of September 30, 2025. The ecosystem has expanded from a single REIT managing 33 million square feet in 2019 to five listed REITs collectively holding 174 million sq ft of office and retail space.

“This remarkable 40% CAGR trajectory across six years reflects increasing investor confidence in commercial real estate as an institutional asset class,” said Lata Pillai, Senior Managing Director & Head of Capital Markets, India, JLL.Pillai further said that India’s five REITs have around ₹230 billion in available borrowing capacity, considering a conservative 35% of the market value. “This gives them significant firepower to acquire premium properties and expand their portfolios.”

She said the unit-holding pattern reveals a substantial increase in institutional holdings by mutual funds, insurance companies, pension funds, sovereign wealth funds, and NBFCs. This reflects the market's increasing maturity and indicates that these major financial institutions view REITs as a reliable investment option, she added.

Strong borrowing capacity fuels expansion

Pillai further said that India’s five REITs have around ₹23,000 crore in available borrowing capacity, considering a conservative 35% of the market value. “This gives them significant firepower to acquire premium properties and expand their portfolios.”

Despite global economic challenges, India’s REITs have demonstrated consistent strength, supported by positive net operating income (NOI) growth across all listed trusts.

Embassy REIT continues to maintain the highest absolute NOI, while Brookfield shows the fastest growth with a 31% CAGR, expanding its portfolio from four to eleven assets in four years. Nexus Select Trust, listed in 2023, has recorded a 6% CAGR in NOI, benefiting from a strong rebound in physical retail demand.

Gross asset value (GAV) growth has also been strong, rising across four office REITs at a 40% CAGR—from ₹33,000 crore to ₹2.1 lakh crore—reflecting the expansion of institutionally managed commercial real estate. Occupancy across these office REITs stood at a healthy 91% as of September 2025. Nexus has also delivered value since listing, achieving a 10% CAGR in GAV through H1 FY26.

The report noted that distribution yields also remained stable between 6–7% in FY25, and early FY26 trends indicate continued steady payouts supported by high-quality office assets in major markets.

The data showed that institutional participation in REITs has risen sharply as well. India’s REIT share in total Grade A office stock grew from 4.2% in 2019 to 15% by June 2025. Embassy REIT saw sponsor holdings fall from 70% to 8%, while institutional ownership climbed to 75%. Nexus Select Trust, too, has seen institutional shareholding rise from 17% to 36% within a year of listing.

Regulatory boost and future potential

The sector received a major regulatory boost in September 2025, when SEBI reclassified REITs as equity instruments—opening the door for equity index inclusion, greater mutual fund allocations, and broader institutional access.

According to Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL, the recent regulatory reforms, strong consumption trends, and robust office market fundamentals have created “substantial headroom” for future growth. He highlighted that investment-grade office assets present a $66–68 billion opportunity, while retail real estate offers a $32–33 billion potential.

Recently, Sebi chairman Tuhin Kanta Pandey said India’s REIT and InvIT framework has played a key role in “unblocking and building India’s infrastructure,” supporting the country’s long-term growth ambitions.

Speaking at the National Conclave on REITs and InvITs 2025 in New Delhi, Pandey indicated that the regulator is examining the calibrated inclusion of REITs in key market indices. Bringing REITs into benchmark indices, he said, would enhance their liquidity, improve visibility, and encourage greater institutional participation in the segment.