REITs’ Leasable Area to Rise 30% by FY28, Credit Profiles to Remain Healthy
- IBEF
- June 24, 2026
India’s listed commercial office real estate investment trusts (REITs) are expected to expand their leasable area by 40-45 million sq ft to 190-195 million sq ft by the end of FY28, according to Crisil Ratings. The growth will be driven by planned asset additions by existing REITs and the listing of a new REIT, with around 16 million sq ft expected to come from the recently listed platform. Crisil noted that the increase in leasable area, coupled with rising rental income, portfolio diversification and controlled leverage, will help sustain healthy credit profiles across the sector. The ratings agency also said that REIT growth is increasingly being supported by inorganic acquisitions of operational assets, which help avoid construction-related risks and provide steady cash flows.
Crisil said office REIT portfolios continue to benefit from strong demand from flexible workspace operators, banking, financial services and insurance companies, as well as global capability centres across sectors. This demand, along with well-located and high-quality assets, is expected to keep occupancy levels stable at 92-93% in FY28, higher than the broader commercial office market. The agency further said that contract-linked rental escalations will help REITs maintain healthy operating margins of about 70%, supporting cash flow generation. While future asset additions may require debt funding, Crisil expects the overall loan-to-value ratio to remain stable at 26-28% through FY28. The report also highlighted that REIT portfolios remain diversified across sectors and geographies, though artificial intelligence-led workplace shifts, a global economic slowdown and any additional REIT listings remain key monitorables.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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