REITs market projected to reach Rs 19.7 tn by 2030, powered by retail, warehousing: Knight Frank India

Knight Frank India, in collaboration with the Confederation of Indian Industry (CII), today unveiled its latest report, Commercial Real Estate: Potential is Built, Opportunity is Now, at the CII Conference on Evolving Landscape of Indian Real Estate – CRE: Unlocking Investments, Opportunities & Economic Growth. The report positions India’s commercial real estate (CRE) sector at a defining juncture, where its built potential is set to translate into tangible growth. Among its key highlights, India’s REIT market is projected to reach INR 19.7 tn by 2030 (from INR 10.4 tn in 2025), driven by high occupancy, favourable taxation, and broader sectoral inclusion. Private equity participation, rising from USD 500 mn in 2011 to multi-billion-dollar highs by 2019, has enhanced transparency, deepened institutional confidence, and paved the way for REIT expansion across India’s thriving CRE landscape. As urbanisation, technology, and progressive policy reforms continue to reshape the sector, India’s CRE stands poised to unlock the next wave of opportunity across asset classes. Retail consumption across the organised formats is estimated at a value of INR 8.8 Tn for FY 2025. Led by shopping centres (INR 4.9 tn), high streets (INR 3.8 tn), and other new-age formats such as airport and transit retail. This expansion reflects a clear shift toward experience-driven, consumer-centric destinations where shopping intersects with lifestyle and leisure. Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “India’s CRE transformation is being led by businesses that are more global, technology-driven and experience-focused than ever before. Consolidation in office demand, resilient retail growth and the rapid expansion of digital infrastructure have fundamentally reshaped occupier behaviour. Today, companies want efficient, green, future-ready spaces, and capital markets are rewarding that shift. As India heads toward a USD 7 tn economy, CRE will play an essential role in powering productivity, attracting investment and building next-generation urban centres.” REITs: Deepening Market Participation India’s REITs have a potential to diversify beyond traditional asset classes like office, retail, and warehousing, to industrial parks, data centres, and hospitality. Listed REITs have delivered stable average annual dividend yield of about 5.5%, making them attractive income-generating vehicles. By 2030, India’s REIT market (including office, retail and warehousing sectors) is projected to reach INR 19.7 tn. India currently has five listed REITs covering about 177 mn sq ft of commercial and retail space spanning operational, under-construction, and upcoming assets worth approximately INR 2.3 tn with over 290,000 unitholders. Office REITs India’s office REITs account for just 15.3% of the total office stock across the top eight cities[1], signalling strong potential for institutional growth. Demand from Global Capability Centres (GCCs) and India-facing businesses continues to strengthen, supported by a steady leasing pipeline and occupier preference for premium, sustainable workspaces. The value of REIT-able office assets is expected to rise from INR 8.2 tn in 2025 to INR 16.0 tn by 2030, nearly doubling in five years. With substantial prime office assets yet to enter REIT structures, broader participation from developers and investors will define the next growth phase for India’s office REIT market. Retail REITs Retail REITs are emerging as a new frontier for India’s real estate market amid a strong revival in organized retail. With only 7.3 mn sq ft of Grade A stock currently under REITs, out of a total of 66 mn sq ft of Grade A stock, there is significant headroom for institutional expansion. The value of REIT-able retail assets is projected to grow from INR 1.5 tn in 2025 to INR 2.4 tn by 2030, driven by rising consumer demand and the shift toward formal retail formats. As malls, lifestyle hubs, and mixed-use developments proliferate, retail REITs offer a structured, transparent way for investors to participate in India’s consumption-led growth story. Warehousing and Industrial REITs Warehousing has emerged as one of the most promising future avenues for REITs in India. Fuelled by e-commerce and third-party logistics (3PL) growth, leasing activity reached 32.1 mn sq ft in H1 2025. The top eight warehousing markets collectively hold 220.9 mn sq ft of Grade A stock, offering vast institutional potential. As technology-enabled, high-quality logistics facilities gain traction among occupiers, industrial and warehousing REITs or InvITs are expected to be launched in the next few years. Value of REIT/InvIT can potentially grow from INR 0.7 tn to INR 1.3 tn by 2030. Neel Raheja, Chair, CII National Committee on Real Estate & Housing, and Group President, K Raheja Corp, said, “The partnership between CII and Knight Frank underscores a shared commitment to advancing India’s built environment. As commercial real estate matures, it will play a pivotal role in shaping investment flows, employment, and urban transformation. The sector’s progress mirrors India’s broader economic journey—where potential is abundant, and the time to seize opportunity is now.” Office: Navigating Supply Constraints and Unlocking Growth India is world’s fourth largest office market (valued at INR 16.4 tn (USD 186 bn) and now it has crossed the 1 bn sq ft milestone in 2025. Over two decades, office stock expanded at a CAGR of 8.6%, underscoring structural resilience and sustained investor appetite. Between 2008 and 2024, gross leasing activity grew 5% CAGR, while new completions rose just 1%, tightening the supply-to-demand ratio from 1.40 in 2008 to 0.49 in 2025. The report notes that several top developers have shifted focus to residential projects for higher margins and quicker returns, deepening supply constraints. To achieve the next milestone of 2 bn sq ft, India’s office sector must blend expansion with optimisation through policy incentives, public-private partnerships/JVs and institutional capital. Integrating green certifications early in the planning process is increasingly seen as best practice, enhancing ESG alignment and unlocking additional FSI. Notably, 31% of existing office stock offers retrofitting potential, while 12% of SEZ assets can be adaptively reused, creating scope for sustainable growth. Retail: Experience, Scale, and Renewed Investor Confidence Across organised formats, retail consumption is estimated at a value of INR 8.8 tn for FY 2025, driven by the expansion of shopping centres, high streets, and emerging formats such as airport and transit retail. Since

Japanese companies are turning to India for GCCs: Here’s Why!

Japanese companies are increasingly looking to India as a strategic hub for establishing Global Capability Centers (GCCs). Traditionally conservative in offshoring, these firms are now compelled by global competition, digital transformation, and talent shortages at home to explore new frontiers. India, with its proven track record as the world’s leading GCC destination, offers the right mix of scale, skill, and cost efficiency. The most critical driver is access to talent. Japan is grappling with an ageing workforce and limited availability of digital skills, while India produces a vast pool of engineers and IT professionals annually. This talent base is not just large but also highly skilled in emerging technologies like AI, data analytics, cloud computing, and cybersecurity—capabilities Japanese companies urgently need to accelerate digital transformation. India produces ~1.5 million STEM graduates every year; Japanese firms rate “access to India’s skilled talent pool” very highly (4.8/5 in a recent survey). Japan is facing a severe labour shortage and population aging: as of 2025, ~30% of Japan’s population is over 65; projections estimate workforce shrinkage of ~11 million by 2040. Cost competitiveness is another factor. Setting up a GCC in India allows Japanese firms to optimize operational expenses while gaining access to high-quality innovation. Moreover, India’s mature ecosystem of service providers, technology parks, and regulatory support makes it easier to establish and scale centers quickly. Companies report potential operational cost savings of up to 40% by shifting GCC functions or scale to India. Japanese labour and real estate costs are several times higher than equivalent costs in Indian cities, making India particularly attractive for functions that do not require local presence or local market exposure. Japanese corporates are also realizing that GCCs are no longer just back offices—they are innovation engines. Many are using India-based GCCs to drive R&D, product development, and global operations, positioning them closer to key growth markets in Asia and beyond. The presence of multinational GCCs in India further reassures Japanese firms that they can replicate proven models successfully. Japanese firms are lagging in certain digital technologies and facing rising pressure to modernize. GCCs are now being used not only for cost or support-functions but increasingly for R&D, AI/ML projects, automation, and advanced analytics. Example: Dai-ichi Life’s new GCC in Hyderabad (in partnership with Capgemini) will focus on AI, data analytics, cybersecurity to accelerate its global digital transformation. Finally, cultural adaptability and the growing India–Japan economic partnership make the move more attractive. With strong government-to-government ties, trade agreements, and joint initiatives in technology and infrastructure, India is emerging as a trusted partner. India’s GCC ecosystem is mature: good infrastructure, multiple preferred hubs (Bengaluru, Hyderabad, Chennai, Pune, Delhi-NCR), regulatory support, and policies favoring innovation and R&D. Bilateral trade and investment ties between India and Japan are strengthening; Japan is a major source of FDI in India. Japanese firms are no longer viewing India merely as a cost arbitrage location; instead, they are treating GCCs in India as strategic innovation hubs. The combination of an abundant tech talent pool, favorable cost differentials, governmental support, and pressing domestic constraints in Japan (aging, labour shortages, rising costs) create a strong case. As India continues to strengthen its infrastructure, policy framework, and ecosystem, more Japanese multinationals are expected to deepen investment, move upstream in value (towards R&D/engineering), and measure GCCs by performance and innovation metrics, not just cost savings.