JLL: India's office sector offers $ 61 bn REIT listing chance

JLL has suggested that India's grade A office market, which spans 393.7 million sq ft across the top seven cities and is valued at over $ 61 billion through a real estate investment trust (REIT). The successful listing of three office asset-based REITs and one retail asset-led REIT in India since 2019 has received positive feedback from both institutional and retail investors. A recent report states that the introduction of a retail asset-led REIT initial public offering (IPO) has brought about a significant change in the real estate market. This has resulted in diversification across various asset classes in India and paved the way for more REITs covering different types of assets. JLL's analysis reveals that among the top seven cities, Bengaluru holds the largest share of office space at 32%, followed by Delhi NCR at 15%, and Mumbai at 14%. The suitability of these cities for REITs is determined by factors such as asset size, quality, ownership pattern, and occupancy levels. Samantak Das, Chief Economist and Head of Research & REITs at JLL India, stated that India's office segment has been highly attractive to global investors due to strong demand growth, low vacancy rates, and increasing rentals. Institutional investments in office space have reached $28 billion between 2005 and 2022, accounting for 42% of the total investments across all real estate segments. The office spaces managed by REITs have experienced significant expansion, growing from 24.8 million square feet as of March 31, 2019, to 74.4 million square feet as of March 31, 2023. Also read: Realty boom in Telangana hits a pause Indian REITs drive growth in commercial real estate market