On a weekday evening in 2025, a young professional in Bengaluru scrolls through her brokerage app. Stocks look pricey, fixed deposits look boring — and then she sees a category she’s mostly ignored: REITs.
“Office rents… in my portfolio?” she wonders.
She’s not alone. That quiet little corner of the market just crossed ₹1 lakh crore in market capitalisation, and according to a new JLL India report, it could unlock an additional ₹10.8 lakh crore opportunity over the next four years — roughly a 5–10× jump in scale depending on which metric you track.
This is the story behind that headline.
1. The starting point: Where India’s REIT market stands today
India’s REIT journey is actually very recent:
- First listing: 2019 (Embassy Office Parks REIT)
- Now: Five listed REITs, spanning office and retail assets, as of late 2025
- Managed area: From 33 million sq. ft. in 2019 to about 174 million sq. ft. in 2025
- Market cap: Up from ₹26,400 crore in FY20 to around ₹1.6 lakh crore as of September 30, 2025
JLL describes the space as having delivered a ~40% compound annual growth rate over six years, reflecting rapidly rising investor confidence in commercial real estate as an institutional asset class.
So we’re not starting from zero. We’re starting from a base that’s finally big enough to matter.
2. What exactly is a REIT, and why does it exist?
Think of a REIT (Real Estate Investment Trust) as:
A mutual fund for large rental properties.
Instead of one developer owning an office park or a mall, a REIT holds a portfolio of income-generating real estate (usually office parks, malls, warehouses, etc.), and investors buy units of that trust, which trade on stock exchanges just like shares.
Key features:
- Owns rent-yielding properties (not just land banks or under-construction inventory)
- Collects rent → pays out most of the cash as distributions (dividends, interest, etc.)
- Listed on exchanges, so investors get:
- Liquidity (buy/sell anytime market is open)
- Transparency (regular disclosures, valuations)
- Typically lower ticket size than buying physical property (you can start with a few thousand rupees).
In India, REITs are particularly focused on:
- Grade A office assets (IT parks, corporate hubs)
- Organised retail (large malls)
- Emerging future candidates: warehousing, data centres, hospitality, student housing (still early-stage in REIT terms).
3. JLL’s big number: ₹10.8 lakh crore — what does it actually mean?
JLL’s recent report, “Emerging Horizons – Analysing REIT Performance in India’s Evolving Real Estate Market”, estimates that:
- India’s REIT market has already crossed the ₹1 lakh crore market-cap milestone.
- There is a potential expansion of about ₹10.8 lakh crore in gross asset value (GAV) over the next four years (till around 2029).
- The office segment alone could account for ~65.3% of this opportunity.
- The bulk of this growth will come from the top seven cities (Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Pune, Kolkata), which have the largest concentration of investment-grade office and retail stock.
Different media summaries frame it slightly differently:
- Some call it a “five-fold expansion” from current GAV of around ₹2.1 trillion.
- Others highlight the potential to push the REIT market towards ₹11 lakh crore by 2029 in market value terms.
But the core takeaway is consistent: the listed REIT ecosystem can become multiple times larger than it is today, driven by both asset additions and higher valuations.
So when we say “10× by 2028”, we’re talking about:
- A 6×+ jump already seen in a few years, from ~₹26,400 crore (FY20) to ~₹1.6 lakh crore (FY25 market cap), and
- A multi-fold (5–10×) potential jump ahead, depending on whether you look at market cap, GAV, or listed asset base.
4. What’s driving this potential explosion?
Let’s break the “10×” story into concrete drivers.
4.1 Office demand: the core growth engine
According to JLL:
- The office segment is expected to contribute about 65.3% of the ₹10.8 lakh crore opportunity.
- India’s IT/ITES, GCC (Global Capability Centres), and services sectors continue to drive strong leasing demand in top cities.
Why offices matter so much:
- Indian cities like Bengaluru, Hyderabad, and Pune are global hubs for technology and back-office operations.
- Global companies prefer institutional-grade office parks with:
- Large floorplates
- Green certifications
- Robust amenities
- These are exactly the kinds of properties that REITs love to own.
4.2 Retail REITs: malls as investible assets
JLL’s growth estimate also includes organised retail: high-quality malls in major cities.
Post-pandemic:
- Top malls have bounced back, with strong footfalls and rising consumption.
- India’s consumer story (rising incomes, urbanisation, e-commerce + offline hybrids) supports stable long-term retail rentals.
This retail stock is now ripe to be packaged into REITs, especially as developers deleverage and look to recycle capital.
4.3 Regulatory tailwinds: SEBI’s evolving stance
The regulator is quietly laying the tracks for growth:
- SEBI has clarified and strengthened the REIT framework over time — reducing minimum subscription sizes, allowing small investors greater access, and ironing out disclosure and governance norms (ongoing since 2014, with continuous refinements).
- A recent shift: from January 1, 2026, investments by Mutual Funds (MFs) and Specialised Investment Funds (SIFs) in REITs will be classified as equity-related instruments, aligning them with their true risk-return profile and enabling easier inclusion in equity schemes and indices. Existing investments via debt schemes will be grandfathered.
What this means in plain language:
Expect more MF schemes, more index inclusion, and more institutional flows into REITs over time.
4.4 Balance sheet strength: firepower to grow
JLL notes that India’s five listed REITs have:
- ~₹23,000 crore in untapped borrowing capacity (estimate varies slightly by source, typically assuming ~35% loan-to-value).
- Healthy occupancy levels around 90–91% on average across portfolios.
- A proven track record of acquiring and integrating new assets.
This gives them the firepower to:
- Buy more high-quality properties from developers.
- Consolidate fragmented portfolios into institutional vehicles.
- Scale up quickly if the cost of capital remains supportive.
4.5 The macro backdrop: India’s growth + real estate formalisation
At a macro level:
- Real estate & construction now account for around 18% of India’s economic output and are among the largest employment generators.
- Government focus on infrastructure spending, urbanisation, and manufacturing/GCC growth keeps demand for quality commercial space high.
- Over time, India is moving from “builder-led, fragmented” real estate to a more institutional, yield-focused market.
REITs are simply the financial-market expression of that shift.
5. How could this play out by 2028–2029?
Let’s connect the dots in narrative form.
Picture this:
- By FY25, the REIT market has crossed ₹1 lakh crore+ in market cap and expanded to five trusts, managing 174 million sq. ft. of office and retail space.
- Developers in top cities hold tens of millions of square feet of stabilised, rent-yielding assets on their balance sheets — many are overleveraged and looking to unlock cash.
- JLL’s numbers suggest USD 66–68 billion worth of office and USD 32–33 billion of retail assets across top seven cities that are REIT-ready or can get there with some seasoning.
- As interest rates stabilise and regulatory clarity improves, more of these assets will migrate into listed REIT platforms.
If even a meaningful chunk of that ₹10.8 lakh crore opportunity is captured:
- The number of listed REITs could increase beyond the current five.
- Existing REITs could bulk up dramatically via acquisitions.
- REITs could become a mainstream asset class in Indian portfolios — like large-cap equities or high-quality debt.
That’s what “ballooning 10×” really implies: not just bigger numbers, but deeper integration into India’s financial system.
6. What does this mean for individual investors?
From a retail investor’s viewpoint, a maturing REIT market brings both opportunities and homework.
6.1 Potential benefits
-
Regular income
- REITs must distribute the majority of their cash flows (subject to Indian rules on distribution).
- For many investors, REIT units are an attractive yield play compared with bank FDs or low-yield bonds (though the risk is higher).
-
Diversification
- You get exposure to commercial property without buying physical real estate.
- Your risk is spread across multiple tenants, buildings, and cities.
-
Liquidity & transparency
- Units trade on NSE/BSE.
- You get regular rent, occupancy, valuation and acquisition disclosures.
-
Access to “institutional-grade” real estate
- These are not your small local shops; you’re co-owning assets like large tech parks and destination malls that individuals normally can’t buy alone.
6.2 Key risks & things to watch
-
Interest rate risk
- Rising rates can pressure valuations (higher discount rates) and increase borrowing costs.
- Distributions may fluctuate.
-
Concentration risk
- Most Indian REITs are office-heavy. A slowdown in hiring, work-from-home shifts, or sector-specific stress (e.g., tech) can hit rentals and occupancy.
-
Regulatory/tax changes
- Tax treatment of distributions (interest vs dividend vs capital repayment) can evolve.
- Rules around leverage, related-party transactions, and asset acquisition may change.
-
Quality of management
- A REIT is only as good as:
- Its sponsor (developer / promoter group)
- Its manager (how they allocate capital, maintain properties, negotiate leases).
- A REIT is only as good as:
For an investor, the homework list usually includes:
- Studying portfolio quality (location, tenant mix, lease structure, WALE).
- Checking debt levels and cost of borrowing.
- Reviewing distribution history and payout ratios.
- Comparing yield vs growth — some REITs offer higher current yields, others focus more on portfolio expansion.
7. Beyond 2028: Could REITs go beyond offices and malls?
The JLL report hints at a second wave of REITs:
- Data centres
- Warehousing and logistics parks
- Student housing and co-living
- Hospitality assets (hotels, resorts)
These asset classes are at different stages of maturity, but the direction is clear:
As India’s economy formalises and deepens, more cash-flowing real assets will be wrapped into listed vehicles.
If the first decade (2019–2029) of REITs in India is about offices and malls, the next could be about infrastructure-adjacent and new-age assets.
8. Tying it all together: Why this matters now
The headline number — ₹10.8 lakh crore potential and 5–10× growth by 2028–2029 — isn’t just a statistic from a consultant’s report.
It captures a bigger shift:
- From developer-led, opaque real estate to market-led, listed vehicles.
- From lumpy, illiquid property bets to tradable, diversified exposures.
- From “property = buy a flat/shop” thinking to “property = one of many asset classes in a portfolio.”
For someone like our Bengaluru professional scrolling through her app, REITs might soon stop looking like an exotic niche and start to feel like a core part of a long-term investment strategy — sitting right alongside equity funds and fixed-income products.
If JLL’s projections even come halfway true, the next four years could be when India’s REIT market moves from “interesting” to “inescapable.”
Reviewed by Aparna Decors
on
December 03, 2025
Rating:
