Indian REITs deliver 6-7% yield, outperforming peers in the US, Singapore: Report

The Indian Real estate investment trust (REIT) sector is currently delivering an average distribution yield of 6-7%, a recent report by ANAROCK Capital in partnership with CREDAI said on Friday, September 12. The REIT market in India is positioning itself ahead of established global markets, including the US and Singapore, the report added.

“Indian REITs are late to the party, but now lead the dance. Despite its late entry compared to global peers, India has strong fundamentals. The distribution yields, currently averaging at 6-7 per cent, are well above many mature markets such as the US and Singapore, among others. Average distribution yields of Indian REITs are competitive with fixed-income instruments but have the added potential for capital appreciation. We take a deep dive into this phenomenon in the report,” said Shobhit Agarwal, CEO, ANAROCK Capital.

Key highlights

The report, named Indian REITS: A Gateway to Institutional Real Estate, released at the 2025 CREDAI NATCON event in Singapore, said that over 60% of the Indian REIT sector’s current market value is driven by a limited number of dominant players focused on Grade A office assets in the IT and Banking, Financial Services and Insurance (BFSI) sectors. In the future, however, the sector is expected to expand into retail, logistics and new-age assets.

“This transformation will unlock unprecedented opportunities for investors and firmly place India among the most dynamic REIT markets in the world,” said Shekhar Patel, President, CREDAI.

While the Indian REIT sector only accounts for 20% of the real estate market globally, when compared to the USA's 96%, Singapore’s 55% and Japan’s 51%, it is growing rapidly. With diversification, industrial and logistics REITs are gaining more attention on the back of heightened e-commerce and digital demand.

Industrial and logistics leasing in India grew by 60% year-on-year (YoY) in the first half of 2025, and the warehousing absorption saw a 30% YoY growth. Further, institutional investment jumped to $2.5 billion in 2024. 

Regulatory reforms like simplified capital gains and dividend tax exemptions, along with reduced lot sizes, have improved transparency and encouraged retail participation, the report said.

It is to be noted that Indian REIT dividends do face higher taxes when compared to the US and Singapore, but attractive yields and a healthy regulatory environment are increasingly attracting domestic and global investment.

“The Indian REIT market, though relatively young, is on a strong growth trajectory and is poised to become a mainstream investment avenue for both domestic and global investors. REITs in India are supported by deep office market demand, rising institutional-grade stock, and a proactive regulatory environment. Attractive yields of 6-7%, coupled with rental escalations and capital appreciation opportunities, make Indian REITs highly competitive compared to global peers,” the report concluded.