Indian REITs Surge Ahead: Landmark Growth and Future Potential Unveiled

The Indian Real Estate Investment Trust (REIT) sector is accelerating, according to Alok Aggarwal, Managing Director and CEO of Brookfield India Real Estate Trust and Chairperson of the Indian REITs Association. Speaking to ANI, Aggarwal attributed the strong growth to favorable government support and policies.

In 2019, the number of unit holders was a mere 6,000, but this has since surged to approximately 300,000, illustrating impressive expansion. Aggarwal predicts that at least one new REIT will be listed annually. REITs serve as investment vehicles, akin to mutual funds in the equities arena, allowing investors to gain from income-generating properties without direct ownership.

Aggarwal noted that the market capitalization of Indian REITs has increased by 50% in recent years, now standing at Rs. 1.5 lakh crore, with distributions reaching around Rs. 25,000 crore. The asset under management has also grown to Rs. 2.25 lakh crore as of Q4, FY2025, with substantial year-on-year distribution increases.

Looking ahead, Aggarwal sees tremendous growth potential with only five REITs currently active in India, contrasting with over 200 globally. Government regulations have played a crucial role, and the minimum investment size reduction from Rs. 2 lakh to Rs. 50,000 has further encouraged participation.

The government's tax incentives, particularly regarding capital gains, have bolstered the sector's performance, making it an appealing option for investors seeking profitable returns. Aggarwal expressed optimism about the sector's future trajectory as it continues to expand.