RBI’s Proposed Framework Could Unlock ₹26,000 Crore Refinancing for Office REITs as Sector Crosses ₹2.4 Lakh Crore: ICRA
Mumbai, June 13, 2026: A new regulatory proposal by the Reserve Bank of India (RBI) could create massive liquidity and growth opportunities for the country’s commercial real estate sector. According to a report by rating agency ICRA, the RBI’s proposed framework permitting commercial banks to lend directly to Real Estate Investment Trusts (REITs) could unlock refinancing opportunities worth nearly ₹26,000 crore for office REITs over the medium term. This expected liquidity pipeline corresponds directly to outstanding Non-Convertible Debenture (NCD) maturities coming due from the financial year 2027 onwards, ICRA said in a press release.
The credit rating agency further noted that the proposed lending framework could significantly boost the capital available for market expansion. At a conservative gross loan-to-value (LTV) ratio of 40%, the regulatory shift is estimated to create an incremental funding pool of ₹75,000 crore to ₹80,000 crore. This additional capital could be readily deployed by office REITs to finance future property acquisitions and drive portfolio expansion across the country.
This regulatory milestone arrives at a time when India’s office REIT market has rapidly scaled, officially emerging as a massive ₹2.4 lakh crore asset class. Data reveals that REIT-owned assets now command a 16% share of the total Grade A office stock across India’s top seven commercial property markets, marking a notable jump from approximately 10% just a year ago. These core markets include Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, the Mumbai Metropolitan Region (MMR), and Pune. The market’s overall scale was further expanded by the recent successful listing of the Bagmane REIT in May 2026, which alone introduced a gross asset value (GAV) of approximately ₹0.4 lakh crore to the sector.
The financial health of India’s listed office REITs remains highly resilient ahead of the framework’s implementation. The sector currently maintains a comfortable consolidated gross LTV ratio of around 24%. This baseline leaves the asset class well-positioned for future growth, sitting significantly below the RBI’s proposed maximum regulatory ceiling of 49%.
Despite facing various global macroeconomic headwinds over the past year, commercial office leasing activity across India has remained remarkably buoyant through the 2026 financial year. Healthy tenant demand has kept overall occupancy levels safely above 80% across all major regional office markets. Leading commercial hubs have shown even greater resilience, with both Bengaluru and the Mumbai Metropolitan Region reporting robust office occupancy levels exceeding 90%.
