While inflation remains subdued, several headwinds persist: corporate investment remains weak, and industrial output has slowed significantly, undermining growth momentum The Times of India.

Industry Voices: Mixed Signals on the Rate Path Ahead

Akhil Saraf, Founder & CEO, Reloy

He argues that, with inflation low and private investment depressed, a “substantial rate cut” is warranted. Lower rates, he says, would revive borrowing, boost demand and restore private-sector confidence — a “decisive push” at a critical juncture.

Vimal Nadar, National Director & Head of Research, Colliers India

Nadar notes that while the RBI has already delivered 100 bps of easing in 2025, including the June move to 5.50%, the bank is likely to maintain a neutral stance for now. Lower financing costs will benefit real estate developers, lenders and homebuyers—especially ahead of the festive housing season in late 2025.

Shrinivas Rao, CEO, Vestian

Rao emphasizes external headwinds, notably U.S. tariffs, urging caution. He expects the RBI to hold rates steady in the near term to maintain macro resilience but leaves room for rate cuts if inflation continues its downward trajectory.

Piyush Bothra, Co‑Founder & CFO, Square Yards

Bothra concurs on a wait-and-watch posture at 5.50%, given global uncertainties and incomplete transmission of earlier cuts. He sees a 25 bps rate cut in October as plausible—timed to support housing demand during the festive quarter.

Macro Context: The Tightrope Between Growth and Inflation

• Inflation trends: Inflation has moderated sharply—from ~3.16% in April to ~2.10% in June—providing the RBI room for further easing Reuters+4Reuters+4Reuters+4Reuters+1Jiraaf+1.
• Growth signals: While Q1 FY26 GDP expanded ~7.4%, industrial production slowed to a 10‑month low (~1.5%), raising concerns about underlying demand The Times of India.
• Global uncertainties: Elevated U.S. tariffs and trade shot at India pose headwinds; economists expect the RBI to monitor spillover risk before easing further ReutersThe Economic Timesdeccanherald.com.
• Policy shift: The RBI moved from an accommodative stance to “neutral” in June, suggesting further action would depend on incoming data rather than past momentum Reuters.

What Lies Ahead

• Markets largely expect the repo rate to stay at 5.50% in August, with approximately 75% of economists anticipating a hold during the MPC meeting on August 6 Reuters.
• Some forecasts—including one from SBI—suggest a 25 bps reduction later in August, to stimulate credit and give an “early Diwali” boost ahead of the festival season The Economic Times.
• Others, including Colliers, Vestian and Square Yards, see October as a more likely date for the next cut, contingent on inflation durability and full transmission of past rate moves.

Summary Table

Final Word

The RBI enters its August 6 Monetary Policy Committee meeting with subdued inflation firmly under control—but with growth signals and investment trends remaining worryingly soft. While most analysts expect the repo rate to remain unchanged at 5.50%, an October rate cut of 25 bps remains on the cards if inflation stays low and the RBI sees positive transmission.

Also Read: RBI Cuts Repo Rate by 25bps: A Boon for Homebuyers and the Real Estate Sector

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Leading banks including HDFC Bank, Canara Bank, and Bank of Baroda have swiftly responded by reducing their marginal cost of funds-based lending rates (MCLRs), passing on the benefits to borrowers. The rate cuts are expected to lower home loan EMIs, bringing relief to both prospective and existing borrowers under floating-rate loan schemes.

The State Bank of India (SBI), the country’s largest lender, also moved to ease borrowing costs, slashing its lending rates by 50 basis points. Effective June 15, SBI’s repo-linked lending rate (RLLR) now stands at 7.75%, while its external benchmark-based lending rate (EBLR) has dropped from 8.65% to 8.15%. However, other major public sector lenders such as Punjab National Bank (PNB) have opted to keep their lending rates unchanged for now, reflecting a more cautious approach.

The overall reduction in borrowing costs is being welcomed by industry leaders and analysts, who believe the move will rekindle buyer interest, especially in the affordable and mid-income housing segments.

Industry Welcomes Move

Prashant Sharma, President of NAREDCO Maharashtra, praised the development, saying, “The interest rate correction is a timely booster for the housing sector. Reduced EMIs will not only revive fence-sitters but also give impetus to end-user-driven demand. We expect this to translate into improved sales velocity, particularly in Tier-I cities like Mumbai and Pune.”

Echoing this sentiment, Nishant Deshmukh, Founder and Managing Partner of Sugee Group, said, “The reduction in lending rates offers much-needed and immediate relief to homebuyers, particularly those dependent on home loans to realise their dream of homeownership. Lower EMIs ease financial pressure and make property ownership more accessible. This positive shift will help restore buyer confidence and support long-term growth in the real estate sector.”

Shraddha Kedia-Agarwal, Director at Transcon Developers, added, “The revised rates will allow homebuyers — especially first-time buyers — to re-evaluate their budgets and invest in homes with better amenities and lifestyle offerings. For developers, this could catalyse fresh enquiries and faster conversions.”

Outlook for the Sector

With lending rates now trending downward and broader macroeconomic indicators showing signs of stability, the real estate sector appears poised for a more broad-based recovery. Market experts believe this shift could be the start of a sustained revival, balancing affordability with aspirational housing needs.

The RBI’s move, coupled with proactive rate revisions by banks, is expected to stimulate demand, boost market sentiment, and strengthen the foundation for long-term growth in India’s housing sector through 2025 and beyond.

Also Read: RBI RR Hike to Impact home sales

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Bengaluru and Delhi NCR emerged as key drivers of this growth, contributing nearly half of the total leasing activity. Chennai also showcased remarkable performance, with office space demand almost doubling to 2.9 million square feet, primarily driven by large transactions from technology firms.

Key Highlights of Q1 2025 Office Leasing:

• Conventional leasing dominates: Conventional workspaces accounted for 86% of the total Grade A office space demand, while flex spaces made up the remaining 14%.
• New supply steady: New office space supply remained stable at 9.9 million square feet, with Bengaluru, Delhi NCR, and Pune contributing nearly 90% of total completions.
• Vacancy rates drop: Strong demand momentum led to a 120-basis-point annual decline in vacancy levels, signaling a healthier market balance.
• Rental growth: Average office rentals surged 8% annually, driven by robust demand and limited new supply in key micro-markets.

City-Wise Leasing Trends (YoY Change)

Source: Colliers India

New Supply Trends

Despite strong leasing demand, new office supply remained stable at 9.9 million square feet. However, the distribution of new supply varied significantly across cities:

• Delhi NCR saw a staggering 440% YoY jump in new supply to 2.7 million square feet.
• Pune also recorded a 150% increase in new completions, reaching 2.5 million square feet.
• Hyderabad witnessed an 88% drop in new supply, with only 0.3 million square feet added.

Sector-Wise Leasing Trends

• Technology firms led demand, leasing 4.4 million square feet (28% share of total absorption).
• BFSI (Banking, Financial Services, and Insurance) and Engineering & Manufacturing sectors collectively accounted for 36% of the total office space uptake.
• Flex space leasing surged 22% YoY, reaching 2.2 million square feet, driven by enterprise-level managed office solutions.

Outlook for 2025

The Indian office leasing market is expected to maintain strong momentum throughout the year, driven by corporate expansions, infrastructure development, and favorable policy measures. With sustained demand, flex spaces are anticipated to gain further traction, potentially constituting 12-15% of occupiers’ portfolios in the coming years.

Arpit Mehrotra, Managing Director, Office Services, India, Colliers, stated, “2025 has started on a strong note, with leasing activity driven by corporate expansions and rising investments in commercial real estate. With policy support and continued demand from global capability centers (GCCs), we expect a strong growth trajectory in Tier I and select Tier II cities.”

As India cements its position as a key global business hub, the commercial real estate sector is poised for sustained growth in the months ahead.

Also Read: Century Real Estate

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APAC Investment Surge Driven by Key Markets

In the second half of 2024, total real estate investments in APAC reached $83.2 billion, marking a 6% YoY growth. South Korea, Japan, and Mainland China led the market, collectively accounting for 59% of these investments. However, the highest YoY increases in investment volumes were observed in India, South Korea, Taiwan, and Australia, with each country recording over 30% growth.

Investment Growth in APAC (H2 2024 YoY)

India’s Real Estate Investment Momentum

India saw institutional real estate investments rise by 88% YoY in H2 2024, reaching $3.0 billion. The office segment remained dominant, attracting 47% of total investments, followed by industrial & logistics assets at 27%. Mumbai emerged as the leading investment destination within India, particularly for office acquisitions.

According to Badal Yagnik, CEO of Colliers India, “Institutional investments in Indian real estate increased by 22% in 2024, totaling $6.5 billion. This trend is expected to continue in 2025, supported by strong economic growth, policy support, and easing monetary conditions.”

Institutional Investments in India by Asset Class (H2 2023 vs H2 2024)

Breakdown of India’s Institutional Real Estate Investments

The following table provides a comparative breakdown of institutional investments across different asset classes in H2 2023 and H2 2024:

2025 Outlook: Steady Growth in APAC Investments

Industry experts predict that real estate investments in APAC will remain strong in 2025, fueled by economic growth, declining borrowing costs, and an increased focus on office, industrial, and logistics assets. The retail and hospitality segments are also witnessing renewed investor interest, with retail investments in APAC growing by 31% YoY to $15.0 billion in H2 2024.

Chris Pilgrim, Managing Director of Global Capital Markets at Colliers Asia Pacific, stated, “The APAC real estate market remains resilient, with institutional investments rising steadily. In 2025, the office segment will continue to thrive, while industrial, logistics, and residential sectors will remain in focus. Retail and hospitality will also see increased activity as investors capitalize on recovery trends.”

With favorable economic conditions and an influx of foreign investments—accounting for 57% of India’s total inflows in H2 2024—India’s real estate market is expected to maintain its growth trajectory in 2025. Both foreign and domestic investors are likely to continue diversifying their portfolios, particularly in high-yield segments such as office and industrial & warehousing.

SFI Analysis

India’s real estate market demonstrated strong investment momentum in H2 2024, with an 88% year-on-year surge, reaching $3.0 billion. Office assets attracted the highest share of investments at 47%, followed by industrial and logistics at 27%. Mumbai led the surge, driven by office asset acquisitions. Institutional investments, particularly from foreign entities, accounted for 57% of the total inflows, reflecting strong global investor confidence. With easing monetary policies and stable economic growth, investment activity is expected to sustain in 2025. Segments like retail, hospitality, and alternative assets may also gain traction, diversifying India’s real estate growth trajectory.

Also Read: APAC Investor Optimism to Drive Institutional Investments in Indian Real Estate in 2025

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Post-budget economic optimism, favorable home loan policies, and rapid infrastructure developments have fueled the demand for residential properties, making real estate a preferred investment choice. Grand Kausa City, spanning 6,48,323 sq. ft., has gained traction due to its strategic location, competitive pricing, and an exclusive 1% payment plan. The project’s pre-launch phase alone saw over 1,500 applications, signaling strong buyer confidence in the emerging micro-market.

A key factor behind the success has been an extensive 360-degree marketing campaign by The Guardians Real Estate Advisory. A Dubai-themed experience center spanning 25,000 sq. ft. was created to offer potential buyers an immersive preview. The campaign also included advertisements across 15+ railway stations, 40+ billboards, 80+ bus shelters, branding in 20+ restaurants, over 1,000 branded auto-rickshaws, and the distribution of 10 lakh leaflets.

The appointment of former Indian cricketer Irfan Pathan as brand ambassador further bolstered the project’s credibility. Community engagement initiatives, such as Urdu poetry recitals drawing 20,000 attendees, sponsorships of local cricket tournaments, and a project rap song, added to its cultural appeal. Digital campaigns with over 30 influencers generated 4.3 million views, a 1.4 lakh Instagram reach in 15 days, and 10,000+ digital leads from India and the UAE.

Located on 24 acres, Grand Kausa City comprises 33-storey residential towers offering luxury 1 and 2-bedroom balcony homes with scenic hill and river views. The development features 50+ lifestyle amenities, including a landscaped podium garden, a 3-level clubhouse, a school, four prayer halls, a 4-acre cricket pitch, and a modern shopping center. Its connectivity to Mumbra Station and an exclusive TMC bus depot enhances its appeal further.

Co-founder & CEO of The Guardians Real Estate Advisory stated that the overwhelming response reflects the firm’s expertise in real estate sales and marketing, setting new industry benchmarks. Another Co-founder & Director emphasized the role of marketing innovations and data-driven strategies in the project’s success, highlighting the potential of emerging micro-markets.

With a track record of 50+ completed projects, 2.5 million sq. ft. delivered, and 7 million sq. ft. constructed, Yes Central continues to shape the real estate landscape with customer-centric developments. The success of Grand Kausa City underscores the impact of economic reforms and strategic marketing in attracting homebuyers, solidifying Mumbra as a sought-after real estate destination.

Also Read: HOMETHON Property Expo 2023

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A Long-Awaited Move

Dr. Niranjan Hiranandani, Chairman of NAREDCO, welcomed the decision, stating, “This long-awaited and strategic move signals resilience in the market. With inflation under control and economic growth on track, lower interest rates will nudge homebuyers towards ownership, enhancing sales velocity.”

Domnic Romell, President of CREDAI-MCHI, emphasized the combined impact of fiscal policies, saying, “The RBI’s decision, along with the Budget’s pro-middle-class measures like higher income tax exemptions and enhanced home loan interest deductions, will encourage homeownership and boost demand, especially in urban centers like the Mumbai Metropolitan Region (MMR).”

Positive Impact on Homebuyers and Developers

Anuj Puri, Chairman of ANAROCK Group, noted that the rate cut aligns well with the recent housing market trends. “With housing prices rising by 13-30% across top cities in the last year, reduced home loan rates will provide a timely breather for buyers. Many first-time homebuyers who were hesitant may now take the plunge.”

Dinesh Yadav, MD of Fine Acers, highlighted the broader economic impact: “This move enhances liquidity, promotes borrowing, and supports consumer demand. It will stimulate residential and commercial activity, benefitting allied industries like construction, cement, and steel.”

Vishal Raheja, Founder & MD of InvestoXpert.com, echoed similar sentiments, stating, “Lower borrowing costs will boost homebuyer sentiment, increasing affordability and driving residential sales. Combined with tax relief, this will revive demand in the housing sector.”

A Boost for the Economy

Amit Bhagat, CEO & MD of ASK Property Fund, stressed the importance of the move for affordable housing. “Declining affordability due to high prices and interest rates had impacted housing sales. This rate cut, along with Budget initiatives like SWAMIH Fund 2, will help sustain demand and drive sales growth.”

Sunil Sisodiya, Founder of Geetanjali Homestate, highlighted the macroeconomic impact: “With inflation stable and GDP growth projected at 6.7%, this policy shift will increase liquidity, making real estate a more attractive investment.”

Cautious Optimism

While the real estate sector welcomes the rate cut, experts caution that its full impact depends on banks passing the benefits to consumers. “The cut will have a significant bearing on homebuyer sentiment, but rising property prices and inflation could limit its effectiveness,” noted Vimal Nadar, Head of Research at Colliers India.

Shrinivas Rao, CEO of Vestian, pointed out potential challenges, saying, “This move aims to boost liquidity, but could also put pressure on the rupee in international markets, affecting foreign investments.”

Piyush Bothra, CFO of Square Yards, summed up the overall sentiment: “Lower borrowing costs, stable inflation, and economic growth create strong tailwinds for real estate. ‘Acchhe din’ for the sector are set to continue.”

Conclusion

The RBI’s first repo rate cut in five years is seen as a major step toward improving housing affordability, boosting demand, and strengthening the real estate sector. As banks begin passing on the benefits, both homebuyers and developers are expected to gain, ensuring sustained momentum in the property market.

Also Read: stamp duty discount for homebuyers

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India’s luxury housing sector has witnessed remarkable growth in recent years, driven by rising demand from high-net-worth individuals (HNIs) and Non-Resident Indians (NRIs). In 2024, luxury housing accounted for 16% of total housing sales, a significant jump from 6% in 2019. The sector’s overall market size was valued at approximately ₹3.89 trillion in 2024 and is projected to reach ₹9.09 trillion by 2030, reflecting a compound annual growth rate (CAGR) of 15%. This growth has been primarily fueled by the premium and luxury housing segment, underscoring the sector’s vast potential over the next five years.

With the upcoming Budget 2025, there is significant anticipation regarding how the government will continue fostering this momentum and attracting greater foreign investment. The budget is expected to introduce policies that enhance the ease of doing business for international investors, making India’s luxury housing market more vibrant than ever. Below are the key expected reforms and their potential impact on foreign investments in the sector.

A. Streamlining Foreign Direct Investment (FDI) Regulations

The government has taken proactive steps to simplify FDI regulations, making India’s luxury housing market more accessible to international investors. These measures aim to boost foreign capital inflows into the real estate sector.

1. Simplified Approval Processes

• The establishment of a one-stop digital platform for real estate approvals will significantly reduce delays in new project launches, enhancing investor confidence.
• A transparent and standardized approval process is expected to attract more global funds, particularly in the luxury residential segment, where international investors show keen interest.

B. Clearer Guidelines & Tax Relief for Foreign Investors

• The introduction of clearer property ownership guidelines under the Foreign Exchange Management Act (FEMA) will provide foreign investors with more security, encouraging long-term investments in India’s premium property market.
• Tax relief initiatives for foreign real estate firms could further stimulate investments, particularly in prime cities like Mumbai, Delhi, and Bengaluru, where luxury housing demand is at its peak.

C. Tax Incentives for Foreign Investors

Tax incentives play a crucial role in attracting foreign investment into the luxury housing sector. The following reforms could make India’s high-end real estate market even more competitive on a global scale:

• Revised GST structure for under-construction luxury properties: Adjusting the current Goods and Services Tax (GST) rate could enhance affordability and encourage greater foreign investor participation.
• Reinstating input tax credits for developers: This could lower construction costs, increasing profitability and making luxury housing projects more attractive to international investors.

D. Reforms in Real Estate Investment Trusts (REITs)

• Changes to the dividend distribution tax structure for REITs could enhance their appeal to foreign investors. A more tax-efficient REIT framework would drive global capital inflows, particularly into high-value luxury projects.
• Granting “industry status” to the real estate sector would facilitate affordable financing for developers, further boosting foreign investor participation in luxury residential and commercial spaces.

Conclusion

As we approach Budget 2025, India’s luxury housing sector is poised for transformational growth. The government’s focus on streamlining FDI regulations, tax incentives, and ease of doing business will create a more investor-friendly environment. With reforms that reduce entry barriers and costs, India’s luxury real estate market is likely to witness increased foreign capital inflows, leading to greater expansion and higher investment returns.

For developers, homebuyers, and investors alike, the enhanced focus on luxury housing presents exciting opportunities. If these anticipated policy changes are implemented, India could solidify its position as a global hotspot for luxury real estate investments in the years ahead.

Also Read: Repo Rate Unchanged – Housing Set for Festive Season

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Premium Segment Gains Momentum

The luxury segment emerged as a key driver of growth, contributing 52% of the total new supply, up from 38% in Q4 2023. This marks a 14.4% YoY increase in premium property supply, indicating rising investor activity and demand for high-end residential units.

Under-Construction Properties Dominate Supply

The supply of under-construction properties surged 10.97% quarter-on-quarter (QoQ), with Gurugram (30.97%), Kolkata (27.80%), and Bengaluru (27.39%) leading the growth. However, the supply of Ready-to-Move (RTM) properties saw minimal growth at 0.03% QoQ, reflecting a steady uptake of completed inventory.

Rising Residential Prices

Residential prices across the 13 markets saw a robust 22.7% YoY increase, driven by cities like Greater Noida (42.5%), Noida (42.4%), and Gurugram (35%). This significant capital appreciation underscores strong market confidence and highlights the sustained demand in these key regions.

Demand Stabilizes

The report also noted a 6.6% YoY increase in residential demand, signaling signs of stabilization. Ahmedabad (18.76%), Delhi (16.63%), and Kolkata (15.69%) were the top-performing cities in terms of demand growth.

Key Trends and Takeaways

The findings emphasize the continued expansion of India’s residential real estate sector, fueled by strong investor confidence and growing demand. With luxury housing accounting for over half of the new supply and cities like Bengaluru and Gurugram driving growth, the sector is poised for further momentum in 2025.

This trend is further supported by insights from over 20 million customers on the Magicbricks platform, reflecting a shift toward premium housing and investment-grade properties.

Also Read: Pan India residential market

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The growth is driven by increased activity in sectors such as IT-BPM, BFSI, engineering and manufacturing, along with the rising influence of Global Capability Centres (GCCs). Fresh leasing is projected to account for nearly 70% of the total gross leasing volume in 2024, highlighting growing business confidence and expansion by both global and domestic players.

“The robust momentum in India’s office real estate leasing reflects the strength and resilience of the country’s business ecosystem. With increased activity in sectors like IT-BPM, BFSI, and manufacturing, we are observing sustained demand for high-quality office spaces, particularly in prime micro-markets. This not only underscores the confidence of global and domestic players in India but also indicates a long-term positive outlook for commercial real estate, driven by infrastructure developments and new supply pipelines,” said Navin Makhija, Managing Director at The Wadhwa Group.

The period from January to September 2024 alone has seen 66.7 million square feet of office leasing, signaling strong year-end numbers. This upward trend also aligns with occupiers’ growing preference for Grade A, well-located office spaces with modern amenities.

“The office real estate sector’s expected milestone of 85 million square feet this year highlights the buoyant market sentiment and increasing business activity. As occupiers prioritize top-grade, well-located office spaces equipped with modern amenities, we are seeing heightened interest from both global entities and domestic businesses,” said Shraddha Kedia-Agarwal, Director at Transcon Developers.

Key micro-markets are experiencing moderate upward pressure on rents due to this demand, particularly in prime business hubs. While consistent supply influx helps maintain a tenant-favorable sentiment, rents are expected to rise steadily in 2025.

“The record gross leasing projections for 2024 are a testament to the steady growth and recovery of India’s office real estate sector post-pandemic. The rising contribution of GCCs and domestic firms expanding their operations showcases the vibrancy of our economy and the evolving workspace dynamics,” said Abhishek Jain, COO of Satellite Developers Private Limited (SDPL).

Cushman & Wakefield’s report predicts that GCCs will account for nearly 30% of the total gross leasing volume, further solidifying their role as a key driver of demand. Tenant representation experts highlight that India’s office sector is not only recovering but transforming to meet the evolving dynamics of workspace requirements, driven by technology, flexibility, and sustainability.

The future outlook for India’s commercial real estate remains optimistic, with prime micro-markets continuing to attract both occupiers and investors. As the sector moves towards a record-breaking year, the steady growth of office leasing reflects the resilience and long-term potential of India’s real estate landscape.

Also Read: Barnsley FC Chairman Neerav Parekh and Mother Kalpana Parekh Buy Luxury Flats in Mumbai for ₹170 Crore

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Despite this, India’s REIT market remains in its early stages compared to global peers, with only four listed REITs, covering an area of 125 million square feet across the retail and office markets. However, REITs are steadily gaining popularity among both foreign and domestic investors, primarily due to attractive dividend returns. Since their inception, Indian REITs have distributed ₹16,800 crore in dividends, surpassing the entire NIFTY Realty Index in terms of payouts. Yet, despite these better returns, the market capitalization of India’s REITs is still relatively low, accounting for just 13.7% of the total listed real estate sector. This is a stark contrast to more mature markets like the USA (98.9%), Australia (94.8%), and the UK (92.5%).

Among the four listed REITs—Embassy REIT, Mindspace REIT, Brookfield India REIT, and Nexus Select Trust REIT—the returns since inception have varied, with Embassy REIT leading at 24%, followed by Mindspace REIT at 18%, Brookfield India REIT at 6%, and Nexus Select Trust REIT at 39%. However, the BSE Realty Index has significantly outperformed REITs, generating a return of 317% over the past 66 months. Despite this, experts believe that India’s favorable regulatory environment, improved returns on investment, and a growing office market will provide a substantial boost to the REIT sector.

City-wise Breakdown of REIT-Worthy Stock

Vestian’s report also provides a city-wise analysis of the REIT-worthy stock across India’s top seven cities. Bengaluru leads with 33% of the total REIT-worthy office stock, followed by Hyderabad (21%) and NCR (15%). Mumbai and Pune together account for 21% of the REIT-worthy stock, while Chennai holds 10% and Kolkata contributes just 1%.

City Breakdown (in million square feet):

Bengaluru boasts the largest share of REIT-worthy stock, while Hyderabad leads in the proportion of REIT-worthy inventory, with around 74% of its office inventory deemed eligible for REITs. In contrast, Kolkata has the smallest share, with only 24% of its total office inventory qualifying as REIT-worthy.

Sustainability Driving REIT-Worthy Stock

An increasing focus on sustainability is evident, as nearly 67% of India’s REIT-worthy stock is green-certified. Green-certified buildings offer a rental premium of 12-14% over non-green buildings, making them more attractive to investors. These premium rentals translate into higher dividend distributions, enhancing the appeal of REITs in India’s commercial real estate market.

“India’s economic growth has spurred a surge in demand for Grade A office spaces, particularly for flexible and managed offices. While supply remains constrained, developers are focusing on meeting this demand with new projects in the pipeline. With REITs currently holding a small share of the Grade A office market, the growing demand presents a significant opportunity for REITs to expand their footprint and enhance their portfolios, delivering greater value to investors.”
— Amal Mishra, Founder and CEO, UrbanVault

The Future of REITs in India

The future of REITs in India looks promising. As mutual funds and corporations progressively increase their stakes in REITs, several are also planning to launch dedicated schemes focused on REIT performance. This influx of capital is expected to improve the liquidity of REITs, making it easier for them to secure funding at competitive rates.

Additionally, the launch of the SM REIT, which targets smaller value assets, represents a step forward in improving liquidity in the sector. As India’s regulatory environment continues to mature, more REIT listings are expected, including expansion into new real estate segments. With continued government support and favorable policies from SEBI, India’s REIT market is poised for significant growth in the coming years.

In conclusion, while REITs are still in the early stages in India, they are expanding rapidly. The favorable regulatory environment, growing demand for office space, and the focus on sustainability make REITs an increasingly attractive investment tool, offering consistent income and diversification for investors.

Also Read: Data Benchmarking Institutions Launched to Empower Indian REIT Investors

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