Indian Reits deliver 6-7% yields, surpassing global benchmarks: Report

Indian Reits yield 6-7 per cent, outpacing US, Singapore and Japan, says Anarock-Credai report, as sector eyes $25 billion market cap and diversification into new asset classes

India’s late entry into the real estate investment trust (Reit) market has been offset by strong fundamentals, with distribution yields averaging 6–7 per cent, said a report by Anarock and Credai.

 

This is well above those in mature markets, such as the US and Singapore, according to the report.

 

Reits in the US offer an average yield of 2.5–3.5 per cent, compared to 5–6 per cent in Singapore and around 4.5–5.5 per cent in Japan.

 

“Indian Reits are late to the party, but now lead the dance,” said Shobhit Agarwal, chief executive officer (CEO), Anarock Capital.

 

He added, “The distribution yields, averaging 6–7 per cent, are higher than many mature markets and remain competitive with fixed-income instruments, while also offering scope for capital appreciation.”

 

Since the first Reit listing in 2019, the sector has grown to a market capitalisation of about $18 billion as of August 2025, and is projected to cross $25 billion by 2030.

 

Yet India’s Reit penetration remains low at 20 per cent of institutional real estate, compared to 96 per cent in the US, 55 per cent in Singapore and 51 per cent in Japan.

 

Mature markets also display greater diversification across retail, industrial, and specialised assets like data centres.

 

In contrast, Indian Reits are still concentrated in Grade A office assets, which provide scale, transparency, and stable cash flows.

 

Diversification is expected as the market matures, with data centre and logistics Reits emerging on the back of rising digital demand and e-commerce growth.

 

Retail mall Reits may follow with industry consolidation, while residential Reits remain a longer-term bet given low rental yields and fragmented ownership.

 

With more asset classes becoming Reitable, penetration could rise to 25–30 per cent by 2030, the report said.

 

A supportive regulatory environment has also bolstered confidence.

 

Since Sebi introduced Reit regulations in 2014, reforms such as reducing lot sizes, simplifying capital gains, and dividend tax exemptions introduced in 2025 have improved transparency, retail participation, and long-term stability.

 

However, dividends from Reits in markets like the US and Singapore are taxed more favourably, making them comparatively more attractive for retail investors.

 

“Over 60 per cent of India’s Reit value rests with a handful of players focused on Grade A offices linked to information technology (IT) and banking, financial services, insurance (BFSI),” said Shekhar Patel, president, Credai. “The future holds far wider promise as Reits expand into retail, logistics, housing, and new-age assets.”