India Office REITs Outperform BSE Realty Index, Record Over 15% Capital Appreciation in Last 12 Months

Gurgaon, July 17, 2025: India’s and China’s Real Estate Investment Trust (REIT) markets showed robust growth in 2024 and are expected to continue to attract strong investor interest this year, according to Cushman & Wakefield’s Asia REIT Market Insight 2024-25. The annual report provides in-depth analyses and comparisons of the five largest REIT markets in Asia: Japan, Singapore, the Chinese mainland, Hong Kong, China (Hong Kong) and India.

The report shows that the Chinese mainland REIT (C-REIT) market achieved a remarkable 85 per cent increase in market value at the end of 2024, surpassing Hong Kong and becoming one of the region’s top three REIT markets.

In the same period, India’s REIT market demonstrated robust growth in the office sector driven by strong leasing demand for institutional-grade office space. Meanwhile, mature markets such as Japan, Singapore and Hong Kong moved toward stabilisation, underlining their long-term resilience.

Indian REIT Market

The financial year 2024–2025 was a strong one for India’s office REITs. The three office REITs collectively garnered leasing volumes of more than 16 mn sq ft (MSF), which accounted for around a fifth of the gross leasing volume (GLV) across the top eight cities in the country. Interestingly, the REIT assets have managed to attract a considerable share of demand coming from global capability centres (GCCs), which is an important growth driver for India’s office markets.

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

After nearly two years of underperformance, India’s office REIT stocks outperformed the BSE Realty Index significantly. During the 12 months up to June, all three office REIT stocks delivered more than 15 per cent capital appreciation. In contrast, the BSE Index experienced a correction. The key driver has been the underlying strength of India’s office real estate market, triggered by heightened demand from GCCs, engineering and manufacturing and BFSI firms. There has also been a growing preference among occupiers for premium-grade assets, significantly benefiting REITs.

Global capability centres drive leasing demand for India office REITs

India’s office asset REITs have attracted a considerable share of demand from GCCs.

At a pan-India level, GCCs have accounted for 28–29 per cent of GLV on average over the last four quarters up to Q1 2025. In contrast, office REIT landlords were able to achieve a much higher share, anywhere between 40 per cent and 60 per cent of total leasing demand from GCC firms, rendering institutionally owned assets the preferred choice for many multinational occupiers.

A fourth office REIT in India is expected to make its listing debut by the end of the calendar year 2025. With 48 MSF of pan-India Grade A office space (37 MSF operational and 11 MSF under development), Knowledge Realty Trust, backed by Blackstone and Sattva Developers, is expected to become one of the largest real estate investment trusts listed in India.

“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 MD, Valuation and Co-head, Capital markets, India at Cushman & Wakefield.

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

Catherine Chen, Director, Investor Client Intelligence and Insights, Asia-Pacific, Cushman & Wakefield said, “The unprecedented growth in the C-REIT market highlights its role as a critical driver of regional expansion while India’s performance emphasises the growing strength of the country’s institutional-grade real estate. These markets continue to create new and exciting opportunities for investors targeting Asia.”

ASIA REIT Market

Cushman & Wakefield’s data showed a total of 263 active REIT products in the Asia market as of December 31, 2024, with a combined market value of $235.8 billion, reflecting a year-on-year decline of 6.5 per cent.

The contraction was primarily driven by declines in the US dollar values of the Japan, Singapore and Hong Kong markets due to the widespread softening in REIT stock prices and unfavourable exchange rate movement.

Amid these declines, the Chinese mainland REIT market emerged as a bright spot, posting an impressive 85 per cent YoY rise in market value, attributable to new REIT product issuances and strong investor demand for infrastructure-backed assets.

In the mature markets, Japanese REITs experienced significant gains in dividend yield led by stock price moderation and asset performance improvement, particularly among hotel REITs, which benefited from inbound tourism. In Singapore, positive total returns were observed across multiple property types in 2024, including data centres at 9.7 per cent and healthcare at 6.9 per cent.

Elsewhere in Asia, Thailand demonstrated robust performance with a 41 per cent increase in market value, marking it as the second-highest growth market in the region. The Philippines, Malaysia and India reported increases of 37 per cent, 21 per cent and 13 per centrespectively, supported by their favourable economic fundamentals and attractive real estate sectors.

Total Market Value of Active REITs on Major Asia Exchanges (December 2024)

Source: Bloomberg database compiled by Cushman & Wakefield Valuation & Advisory Services

Looking Ahead

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

“We expect the mature markets of Japan, Singapore and Hong Kong to focus on enhancing operational efficiencies while grappling with the challenges posed by global monetary policy shifts,” said Chen.

“On the other hand, emerging markets, particularly the Chinese mainland, India and Thailand, are expected to continue to grow bolstered by strong economic fundamentals and supportive regulatory frameworks.”

The report also noted that data centre and hospitality REITs are expected to remain highly visible on investors’ radar driven by AI advancements and recovery in the tourism sector respectively. Additionally, M&A activity is likely to pick up as players seek scale and diversification to better weather market fluctuations.