India Set to Dominate Global REIT Market: Vestian Forecasts

India's REIT Ambition

India is strategically positioned to become the world's most dynamic Real Estate Investment Trust (REIT) market, according to a report by US-based real estate consultant Vestian. Developers are increasingly looking to monetize their rent-yielding commercial properties through the REIT structure.

Growth Projections and Drivers

Vestian anticipates substantial growth, projecting the Indian REIT market's capitalization to expand from $18 billion in 2025 to $25 billion by 2030. This surge is fueled by prime commercial assets, including office spaces, retail, warehousing, and data centers. The report emphasizes that diversification beyond traditional office and selective retail properties into newer asset classes like data centers and logistics will be crucial for sustained expansion and global leadership.

Asset Class Performance

Office assets currently anchor the market, with listed portfolios spanning over 135 million square feet. These benefit from predictable leasing demand, supporting stable yields of 5-7%. India possesses over 1 billion square feet of office stock, with nearly 500 million square feet deemed REIT-worthy. While residential real estate shows potential, it faces structural challenges, including low rental yields of 2-3%, fragmented ownership, and high tenant churn, limiting viability for now.

Future Prospects and Challenges

Emerging formats like co-living and student housing offer promise, but residential REITs remain a longer-term prospect. The market is progressing from infancy toward adolescence, with a projected increase in market capitalization. The upcoming draft filing by Bagmane Prime Office REIT for an up to ₹4,000 crore IPO signals further maturation, potentially adding a sixth listed REIT to the Indian landscape.