New Delhi [India], June 19: Global Capability Centres (GCCs) and a handful of South Indian office markets are the only drivers of India’s Real Estate Investment Trust (REIT) market.
This reality raises concerns about concentration risks despite growth figures and investor participation.
A latest report by Colliers India titled “India REITs: Gaining scale & unlocking value”, reveals that the operational assets under listed REITs and real estate-focused InvITs have crossed 195 million square feet as of March 2026. While the office assets accounts for nearly 84 per cent of the total portfolio. The report shows that the office REIT segment alone has more than doubled in size over the past five years, growing from about 72 million square feet in 2021 to nearly 164 million square feet.
The findings of the report reveals that the REIT market growth is concentrated as the Bengaluru which is known as the Silicon City of India accounts for almost 42 per cent of the total office assets held under the REITs. Other cities such as Hyderabad, Mumbai and Delhi-NCR contribute between 12 and 15 per cent each.
Together, Bengaluru and Hyderabad represent more than half of India's office REIT portfolio.
Now, interestingly, it is not just about the geography but there is a significant difference on sectoral front as well. While tech firms occupy roughly one-third of office REIT space, the banking and financial services firms account only 15-20 per cent occupancy.
More significantly, GCCs have emerged as the dominant demand driver, contributing 40-60 per cent of recent leasing activity within REIT-owned assets, the figures by Colliers India shows.
While the GCCs have helped the RIETs to maintain high occupancy levels and rental growth but any disruption in the economic cycles and corporate spending, outsourcing activity or hiring will significantly impact the ecosystem.
The findings show that the REIT/InvIT assets is more evident in retail and industrial & warehousing segments, in line with the broader market trend of emerging consumption and logistics hubs which are already witnessing notable activity.
At around 7.5 and 5.4 million sq ft of operational stock in these emerging cities, Tier II/III markets currently account for around 35% and 51% of the industrial & warehousing InvIT and retail REIT portfolio respectively.
The report said office REIT assets recorded cumulative gross leasing of more than 60 million square feet since 2021, while occupancy levels across listed office REITs remained above 90 per cent as of March 2026. Average rentals in REIT-owned assets also rose by 4-8 per cent annually.
A deeper analysis of the report reveals that REIT penetration is still limited, despite the growth momentum as the data shows that only about 19 per cent of India's Grade A office stock across the top seven cities is currently housed under REIT structures.
Colliers estimates that an additional 370 million square feet of office stock could potentially be monetised through future REIT listings.
Notably, Hyderabad and Bengaluru account for around 40 per cent of this future REIT-ready inventory, indicating that the next phase of sector expansion may remain concentrated in the same southern markets that currently dominate the landscape.
“REIT penetration levels in the office market can potentially reach 30% by 2030, supported by influx of high quality green-certified assets, strong occupier demand and sustained investor appetite”, says Badal Yagnik, CEO & Managing Director, Colliers India.
The report also highlighted the limited participation of smaller cities. Around 93 per cent of REIT and InvIT assets remain concentrated in Tier-I cities, with Tier-II and Tier-III markets accounting for only 7 per cent of the total operational portfolio.
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