Indian listed REITs – Embassy, Mindspace & Brookfield – have just 117.2 Mn sq. ft. combined office space portfolio
MUMBAI, June 19 (The CONNECT)- Despite being a late entrant to the REIT sector, their market capitalization in India has surpassed that of some major economies with matured REIT markets.
Despite their growth potential, however, just 23% of the total REIT-worthy office stock – approx. 520 Mn sq. ft. – across the top 7 cities is currently listed in REIT portfolios, latest ANAROCK Research data shows.
Anuj Puri, Chairman – ANAROCK Group, says, “The three listed Indian REITs – Embassy Office Parks, Mindspace Business Parks and Brookfield India – have a combined portfolio of just 117.2 Mn sq. ft., which is just 23% of the overall REIT-able Indian office space market.
This indicates significant headroom for future REIT listings and office market consolidation across the top 7 cities.
With approx. 313 Mn sq. ft., the southern cities of Bengaluru, Hyderabad and Chennai currently host the maximum available REIT-worthy office stock. However, just 18% of this stock is listed in REIT portfolios:
Bengaluru has the highest REITable office stock of approx. 162 mn sq. ft., of which just 24% or approx. 39 mn sq. ft. is currently listed under REIT portfolios; in Hyderabad, just 16% of a total 102 Mn sq. ft. of REIT-worthy office stock is actually listed; in Chennai, just 4% of 49 Mn sq. ft. REIT-complaint office stock is REIT-listed.
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What’s this REIT About!
A Grade A office asset that meets the requirements of a REIT for it to be listed with it.
Key Requirements for Office Assets in a REIT
- Asset Type: Must be a permanent structure like an office building with integrated systems (HVAC, plumbing, etc.).
- Income Source:
– At least 75% of income must come from real estate (e.g., rent).
– Rent must be from unrelated parties and not based on tenant profits.
- Distribution: REIT must distribute at least 90% of taxable income to shareholders annually.
- Ownership Rules:
– At least 100 shareholders.
– No more than 50% of shares held by 5 or fewer individuals.
- Asset Quality:
– High occupancy and long-term leases.
– Prime location and modern infrastructure.
– Energy-efficient and sustainable features
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In the North, Delhi-NCR currently has a total of REIT-worthy stock of 82 Mn sq. ft., of which just 30% is listed
The top Western markets MMR and Pune have a combined REITable office stock of 118 Mn sq. ft., of which just 27% is REIT-listed. MMR has REIT-worthy office stock of approx. 80 Mn sq. ft., of which approx. 23.4 Mn sq. ft. (29%) is listed; of 38 Mn of overall REITable stock in Pune, just 24% or approx. 9 Mn sq. ft. is REIT-listed.
Kolkata currently has REIT-suitable stock of approx. 7 Mn sq. ft., of which 43% is already listed.
“Data trends indicate that in 2023, the total REIT-worthy office stock in the top 7 cities was approx. 383 Mn sq. ft.,” says Puri. “This has grown by 36% since then to approx. 520 Mn sq. ft. currently, thanks largely to generous new office supply infusions since 2023 and also upgradation of old Grade A office stock to meet current demand and standards.”
ANAROCK data shows that approx. 106.4 Mn sq. ft. of Grade A office space has been added across the top 7 cities from 2023 till Q1 2025. Meanwhile, out of the total available Grade A office stock across the top 7 cities (approx. 850 mn sq. ft.), at least 400 Mn sq. ft. (or 47%) is older than 10 years and can be upgraded to REIT standards. This will not only increase REIT-worthy stock across cities but also help increase office rental premiums by 10-30%.
In terms of appreciation, as of 16th June 2025, India’s office REITs have shown strong 1-year performance, driven by robust leasing activity and steady rental escalations. For instance, Mindspace Business Parks REIT led the pack with a 23.34% annual return, followed by Brookfield India REIT at 15.19%, and Embassy Office Parks REIT at 9.17%
