Domestic commercial office real estate investment trusts will expand leasable area by 40 to 45 million square feet (mn sq ft) to 190 to 195 million square feet by fiscal 2028, a rise of 25 to 30 per cent, Crisil Ratings said. The agency cited planned asset additions and the recent listing of a new REIT and said credit profiles should remain healthy on steady rental income, strong occupancy and controlled leverage. Of the added 40 to 45 mn sq ft, 16 mn sq ft will stem from the recent listing, with inorganic acquisitions expected to lead additions to avoid construction-related risks. Since the first REIT listing seven years ago to fiscal 2026, acquisitions accounted for 75 per cent of asset additions, the analysis showed. The right of first offer on sponsor-developed or acquired assets is set to underpin further supply into REITs. Crisil said demand remains robust across sectors, with flexible workspace operators, banking, financial services and insurance firms, and global capability centres driving absorption. Occupancy for REIT portfolios is expected to stay at about 92 to 93 per cent this fiscal, above the overall commercial office sector. Sustained occupancy alongside contracted rental escalations should allow REITs to maintain an EBITDA margin of about 70 per cent and strong cash flows, although most surplus is distributed to unitholders, and additions will need debt funding. The agency expects the overall loan-to-value ratio to remain around 26 to 28 per cent through fiscal 2028, similar to the March 2026 level, as debt growth is likely to be offset by commensurate rises in gross asset value based on discounted cash flows. REIT business profiles are supported by diversified portfolios across sectors and locations, with the top three sectors and top three locations accounting for roughly 70 to 75 per cent and 60 to 65 per cent of leasable area, respectively. Crisil cautioned that potential disruption from artificial intelligence, a global slowdown affecting occupancy, and any further REIT listings will require monitoring.