Dividend yield: How Indian REITs compare with the US, UK, Singapore, Hong Kong, Japan, Australia

The average dividend yield of the top three Real Estate Investment Trusts (REITs) in India is higher than countries like the USA, UK, Australia, Malaysia and Japan. However, it is lower than Singapore and Hong Kong, according to a FICCI-ANAROCK report titled 'Workplaces 2025: India Commercial Real Estate Reimagined.

India is one of the late entrants to the REITs market. Officially, REITs were introduced in India in 2014. In countries like the USA and Australia, REITs have existed since 1960 and 1971, respectively. Malaysia launched REITs in 1989, while Japan introduced it in 2001. Singapore, Hong Kong and the UK had REITs from 2002, 2003, and 2007, respectively.

The first REIT in India was listed only in 2019. Yet in just a few years, and with only five listed trusts, Indian REITs have achieved a market capitalisation of USD 18 billion, which is bigger than Hong Kong and Malaysia. Both these countries have 11 and 18 listed REITs, respectively.

Average dividend yield of top 3 REITs by country

The report says India’s commercial real estate sector has witnessed a structural transformation with the REITs. "They have helped democratize property investments by allowing retail investors to participate in what was once an institutional-dominated asset class."

"These REITs have not only enhanced transparency and liquidity in the market but also provided investors with stable, income-generating opportunities. Over time, they have continued to expand their portfolios, acquiring premium Grade-A assets across major cities," the report says.

REITs potential in India

Indian REITs remain largely focused on office assets, supported by stable lease structures, strong credit profiles, and steady yields led by the IT-ITeS sector.

They account for only about 20% of the country’s total institutional real estate, which is significantly lower than other mature markets.

"This relatively limited presence is largely due to its concentrated focus on Grade A office assets, which offer scale, income stability, and consistent demand from high-quality tenants. However, the landscape is set to broaden as the market evolves," the report says.

According to the report, India’s REIT penetration could climb to 25%–30% by 2030. It says, "With increasing institutional participation, policy support, and expanding asset inclusion, India’s REIT penetration could climb to 25%–30% by 2030, positioning it among the world’s most dynamic and rapidly expanding REIT ecosystems."

Future growth in REITs in India is expected to be driven by diversification into alternative asset classes such as data centers, logistics parks, and retail malls, reflecting changing investor preferences and occupier trends, according to the report.

Residential REITs may take longer to materialise due to regulatory and market complexities. However, gradual progress in this direction appears likely, the report says.

Four active REITs in India

Following are the four active REITs in India at present.

• Embassy Office Parks

• Mindspace Business Parks,

• Brookfield India

• Nexus Select Trust

These active REITs currently occupy only about 32%, i.e 165 Mn sq ft of the total 520 Mn sq ft of REIT-worthy office stocks across the top seven cities.

"The southern cities led by Bengaluru, followed by Hyderabad and Chennai, collectively account for around 313 Mn sq ft of this potential stock, with only 31% currently listed, signaling strong opportunities for future REIT growth and portfolio diversification," the report says.