GWS 2025: Office Spaces to Remain the Core of REIT Investments, Say Industry Experts

2025-03-10 02:32:54

Office REITs Overcome Pandemic Challenges, Poised for Growth Across Sectors: Industry Leaders

Top executives from India’s leading office REITs assert that the sector has successfully navigated challenges, including the COVID-19 crisis, real estate trust deficits, and SEZ demarcation issues. While office spaces will remain the dominant segment, new opportunities in warehousing, data centers, hospitals, and residential projects are emerging.

Speaking at the Moneycontrol Global Wealth Summit 2025, leaders from Brookfield India REIT, Mindspace Business Parks REIT, and Embassy Office Parks REIT highlighted the strong recovery in occupancy rates, increasing investor confidence, and the potential for REITs to generate stable passive income. Despite past volatility, they emphasized that REITs are entering a phase of sustained growth, with assets under management expected to expand significantly over the next two decades.

"We went through an existential crisis in the form of COVID, and the rate reversal put a lot of plans (on hold). I think we are at an early stage in the commercial cycle. Unfortunately, the distributions have not matched that, but right now, we are looking at a period of pretty high growth," Bhattacharjee added, noting that REITs have completed distribution of around Rs 20,000 crore through "volatile cycles".

The panelists noted that of the around 830 million square feet of office space in India, REITs collectively hold and manage around 10-12 percent, much less than that of economies such as the United States, with Aggarwal saying that assets under management for REITs may grow by 15 to 20 times over the two decades. However, industry observers have also expressed concerns over the paucity of Grade-A assets in India, with panelists saying that REITs are exploring multiple new asset classes.

"Close to 430 million square feet of the 830 million square feet of office space in India are owned by single landlord, institutional investors, or REITs. Every year, the market is adding around 50 million square feet. India has now become the office of the world, with hundreds of new global capability centres setting up in India...We are doing five data centres and three hotels, as well as more mixed-use campuses," Mindspace REIT's Nair said.