Indian REITs drive growth in commercial real estate market
Real Estate

Indian REITs drive growth in commercial real estate market

Data from JLL India reveals that the Indian commercial real estate market offers high-quality office spaces spanning a total area of 393.7 million square feet, capable of generating rental income. These assets, valued at over $61 billion, can be listed through Real Estate Investment Trusts (REITs). Since 2019, the listing of three offices asset-based REITs in India has received strong interest from institutional and retail investors.

The introduction of REIT listings in India has provided an investment option in real estate similar to mutual funds. The consistent growth of the Indian office market, coupled with the increased transparency brought about by REIT implementation, has created a favourable environment for major financial institutions to participate in these listings.

Lata Pillai, Senior Managing Director and Head of Capital Markets, India, JLL, stated that retail and hotel sectors have witnessed strong demand post-pandemic, resulting in revised asset pricing. In recent years, warehousing has also experienced significant growth, with global funds aggregating these assets through various platforms. Listing these asset portfolios through REITs is seen as the next logical step in this progression.

Pillai further anticipates that the Indian real estate market will witness additional REIT listings of alternative asset classes, while the office sector will continue to see steady growth in REIT listings.

Samantak Das, Chief Economist and Head of Research & REIS, India, JLL, highlighted that India's office segment has been highly attractive to global investors due to robust demand growth, low vacancy rates, and rising rental prices. Institutional investments in office spaces reached $28 billion during the period from 2005 to 2022, accounting for a 42 per cent share of total investments across all real estate segments.

The first three REIT listings in India predominantly consisted of office assets. Among the top seven cities, Bengaluru holds the largest share of office space at 32 per cent, followed by Delhi NCR at 15 per cent and Mumbai at 14 per cent. The assessment of potential REIT stocks considers factors such as asset size, quality, ownership pattern, and occupancy levels.

The office spaces managed by REITs have experienced significant growth, expanding three-fold from 24.8 million square feet in March 2019 to 74.4 million square feet in March 2023. The revenues of REITs have also seen a substantial increase, attributed to their ability to raise portfolio lease rentals. Over the past three years, these rentals have grown at a compound annual growth rate (CAGR) of 5.5 per cent, compared to 2 per cent for similar non-listed assets.

Also Read
5.58 lakh homes could be completed in 2023 across 7 cities
NCR emerges as thriving commercial realty hub


Data from JLL India reveals that the Indian commercial real estate market offers high-quality office spaces spanning a total area of 393.7 million square feet, capable of generating rental income. These assets, valued at over $61 billion, can be listed through Real Estate Investment Trusts (REITs). Since 2019, the listing of three offices asset-based REITs in India has received strong interest from institutional and retail investors. The introduction of REIT listings in India has provided an investment option in real estate similar to mutual funds. The consistent growth of the Indian office market, coupled with the increased transparency brought about by REIT implementation, has created a favourable environment for major financial institutions to participate in these listings. Lata Pillai, Senior Managing Director and Head of Capital Markets, India, JLL, stated that retail and hotel sectors have witnessed strong demand post-pandemic, resulting in revised asset pricing. In recent years, warehousing has also experienced significant growth, with global funds aggregating these assets through various platforms. Listing these asset portfolios through REITs is seen as the next logical step in this progression. Pillai further anticipates that the Indian real estate market will witness additional REIT listings of alternative asset classes, while the office sector will continue to see steady growth in REIT listings. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL, highlighted that India's office segment has been highly attractive to global investors due to robust demand growth, low vacancy rates, and rising rental prices. Institutional investments in office spaces reached $28 billion during the period from 2005 to 2022, accounting for a 42 per cent share of total investments across all real estate segments. The first three REIT listings in India predominantly consisted of office assets. Among the top seven cities, Bengaluru holds the largest share of office space at 32 per cent, followed by Delhi NCR at 15 per cent and Mumbai at 14 per cent. The assessment of potential REIT stocks considers factors such as asset size, quality, ownership pattern, and occupancy levels. The office spaces managed by REITs have experienced significant growth, expanding three-fold from 24.8 million square feet in March 2019 to 74.4 million square feet in March 2023. The revenues of REITs have also seen a substantial increase, attributed to their ability to raise portfolio lease rentals. Over the past three years, these rentals have grown at a compound annual growth rate (CAGR) of 5.5 per cent, compared to 2 per cent for similar non-listed assets. Also Read 5.58 lakh homes could be completed in 2023 across 7 citiesNCR emerges as thriving commercial realty hub

Next Story
Building Material

JK Cement emerges successful bidder for Mahan coal mine in Madhya Pradesh

This marks the company’s second commercial coal block win, following its acquisition of the West of Shahdol (South) coal block. "The company is committed to becoming self-reliant for its existing cement plants and upcoming projects," JKC stated. The surplus coal from the mine will be sold commercially. The vesting order was handed over to JK Cement during a ceremony at Shastri Bhawan, New Delhi, a critical milestone for commencing mining operations within the stipulated timeline...

Next Story
Building Material

Prism Johnson's cement division goes live with Ramco ERP Suite

Prism Johnson has successfully gone live with the Ramco ERP Suite for its Cement Division. This milestone marks a significant step in Prism Johnson's digital transformation journey, leveraging Ramco Systems' advanced enterprise solutions and process control systems to streamline business processes, manufacturing operations and drive efficiency. The implementation includes cutting-edge modules for Maintenance, Sales, Distribution, Finance, Procurement, Manufacturing, Quality, and HR Management (HRM). These solutions enable Prism Johnson to achieve seamless integration across its business and wo..

Next Story
Infrastructure Urban

Indian shadow bank Shriram Finance gets record $1.28 billion loan

Shriram Finance Ltd. is reported to have borrowed $1.28 billion in a multi-currency social loan, marking the largest offshore facility ever undertaken by an Indian shadow lender. According to a press release issued by Shriram, the deal is divided across the dollar, euro, and dirham. Sources familiar with the transaction, who wished to remain anonymous, indicated that the tenors in the multi-tranche deal range from three to five years. This loan adds to the surge of offshore debt sales by Indian shadow lenders this year, a trend prompted by the Reserve Bank of India's tightening of rules in Nov..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000