India office REITs outperform BSE Realty Index, log over 15 pc capital appreciation in 1 year

New Delhi, July 17 (IANS) India’s office real estate investment trust (REIT) markets outperformed the BSE Realty Index, recording over 15 per cent capital appreciation in last 12 months (up to June 2025), a report showed on Thursday.

The key driver has been the underlying strength of India’s office real estate market, triggered by heightened demand from global capability centres (GCCs), engineering and manufacturing, and BFSI firms. There has also been a growing preference among occupiers for premium grade assets, thereby significantly benefiting REITs, said Cushman & Wakefield’s ‘Asia REIT Market Insight 2024-25’.

India’s REIT markets showed robust growth in 2024 and are expected to continue to attract strong investor interest this year.

The financial year 2024–2025 (ending March 2025) was a strong one for India’s office REITs. The three office REITs collectively garnered leasing volumes of more than 16 million square feet, which accounted for close to a fifth of the gross leasing volume (GLV) across the top eight cities in the country.

As of June 2025, the Indian REIT market comprised three office REITs and one retail REIT, collectively managing an operational portfolio of over 105 million sq. ft.

While the number of listed REITs remained constant over the past year, their combined portfolio grew by more than 12 per cent, raising the institutional share to approximately 13 per cent of India’s total Grade A office stock.

Apart from this, more than 23 million sq ft of new office space is under construction or is planned by the existing office REITs, and it is expected this new supply to be added to the total REIT portfolio in the coming years, said the report.

India’s office asset REITs have attracted a considerable share of demand from GCCs, which is an important growth driver for India’s office markets.

At a pan-India level, GCCs have accounted for 28 per cent–29 per cent of gross leasing volume on average over the last four quarters up to Q1 2025.

“India’s REIT market continues to carve a strong trajectory, with exceptional growth seen across the office sector. Multinational companies, especially GCCs have driven record leasing activity, which now accounts for a significant share of the nation’s Grade A office stock,” said Somy Thomas, Executive Managing Director, Valuations and Co-Head, Capital Markets, India at Cushman & Wakefield.

There has also been a growing preference among occupiers for premium grade assets, thereby significantly benefiting REITs. All three office REITs in India achieved occupancy rates close to 90 per cent at the end of Q1 2025, he mentioned.

The Asia REIT market is poised for continued evolution as it navigates the dual forces of mature market stabilisation and emerging market expansion.

—IANS

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