New Delhi:India’s real estate investment trust (REIT) market grew 31% year on year in 2023, recording the steepest growth across the Asia Pacific region and emerging a strong opportunity for investors, a report by realty services firm Cushman & Wakefield indicated.
The introduction of Blackstone’s Nexus Select Trust, the country’s first publicly listed retail REIT, partly contributed to this outstanding growth in a year when the overall Asian REIT market declined by 7% to $252 billion.
“The positive outlook for office markets, with employees returning to work and large deals back in the market along with high occupancy rates in existing portfolios, further supports t ..
The market in India is still nascent, with only four REITs. Initial public offerings (IPOs) of all the four, within the last five-year period, with high investor interest, indicating the product’s attractiveness to investors.
There are 225 active REITs across Asia. Traditional market powerhouses of Japan, Singapore and Hong Kong dominate with a combined share of more than 80% of the total Asia REIT market value.
However, the emerging Chinese mainland and India REIT markets, as the fourth and fifth largest in Asia, respectively, are adding new layers of opportunity and growth, the report said.
India’s strong performance highlights its emergence as a significant player, offering investors attractive opportunities for diversification and growth, it said.
Frequently asked questions
What is a REIT?
A Real Estate Investment Trust is a SEBI-regulated, listed trust that owns income-producing real estate (typically Grade-A offices). It is required to distribute at least 90% of its net distributable cash flow to unitholders, giving investors rental-style income without owning property directly.
What is the difference between a REIT and an InvIT?
Both are listed, yield-paying trusts, but REITs hold real estate (offices, malls, warehouses) while InvITs (Infrastructure Investment Trusts) hold operating infrastructure such as roads, power transmission lines and telecom towers.
What are SM REITs?
Small and Medium REITs are a SEBI framework (notified in 2024) for trusts holding smaller asset pools — broadly ₹50–500 crore in value — with a minimum investment of around ₹10 lakh. They formalise what fractional-ownership platforms were previously doing.
How are REIT distributions taxed?
REIT payouts can be a mix of dividend, interest, rental income and return of capital, and each component is taxed differently in the investor's hands. The blended effective rate depends on the mix, so review the trust's distribution break-up each period.
Key terms
- NDCF
- Net Distributable Cash Flow — the cash a REIT/InvIT is required to pay out (at least 90%) to unitholders; the basis of the distribution yield.
- Distribution yield
- Annual distribution per unit divided by the unit price — the headline income return investors compare across REITs.
- Occupancy
- The share of leasable area that is currently let. Higher, stable occupancy supports more reliable distributions.
- GLA
- Gross Leasable Area — the total floor area available to lease, used to size a REIT's portfolio and measure lease expiries.
- WALE
- Weighted Average Lease Expiry — the average remaining lease term across tenants; a longer WALE means more visible future income.