Over 300 MSF office space creates fresh acquisition opportunity for REITs: Report

The report said favourable office market conditions, including strong leasing momentum, rental growth and developer-owned inventory, could support fresh capital raising and acquisitions by REITs. It said the available inventory creates an opportunity for REITs to pursue both stabilised assets that can generate immediate income and assets nearing completion that can support future growth.

Of the roughly 854 MSF of organised office stock in India, around 620 MSF is held by developers or high-net-worth individuals, while about 307 MSF is Grade A, non-strata stock that remains available for potential REIT acquisitions, according to the report.

Equirus said the opportunity is supported by continued growth in office leasing and rents across major cities. It expects rental growth between 2025 and 2027 to range from 2.9 per cent in Hyderabad to 5.3 per cent in Bengaluru. The report also highlighted the potential to acquire large 5-10 MSF-plus assets in single transactions, which could help REITs expand their portfolios more quickly.

The report noted that REITs have already expanded their presence significantly. Office stock under REITs has risen to around 163 MSF in the first quarter of 2026 from 71.8 MSF in 2021, taking their share of total office stock to about 19 per cent from 11.2 per cent.

REIT market capitalisation has more than tripled since FY22 to Rs 2.03 lakh crore, while the number of unitholders has increased nearly five-fold to 3.7 lakh.

The report said REIT expansion is likely to be supported by sponsor-owned assets, selective third-party acquisitions and relatively conservative leverage, providing multiple avenues for portfolio growth as the office market remains supportive.

The report further noted that Bengaluru has emerged as the dominant office market, accounting for about Rs 1.3 lakh crore, or 46 per cent, of the roughly Rs 2.8 lakh crore gross asset value of listed Indian office REITs. (ANI)