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Crisil Ratings expects India's REIT sector to see strong expansion, with gross asset value projected to grow by 35-40 per cent by the end of fiscal 2027 compared to September 2025. Growth will be driven mainly by acquisitions of completed office assets and the listing of a new REIT, adding significantly to overall leasable space. Occupancy levels are expected to improve further, supported by steady demand from global capability centres, BFSI firms and flexible workspace operators. Stable rental income, healthy EBITDA margins of around 70 per cent and controlled leverage are likely to keep credit profiles steady. While debt may rise to fund acquisitions, equity inflows and diversified portfolios are expected to support financial stability.
Crisil Ratings projects that the gross asset value of India's REITs will grow by roughly 35-40% by the end of fiscal 2027 compared with September 2025 figures. This growth is expected to be supported by both acquisitions of existing operating properties and the listing of a new REIT, which will expand the overall asset base. Strengthening rental income, steady occupancy levels, and prudent management of leverage are likely to maintain stable credit profiles across the sector. Advertisement
REITs in India typically expand their portfolios through acquisitions rather than under-construction developments, which regulations allow up to 20% of GAV. Currently, under-construction assets account for a minor portion of GAV, and this trend is expected to continue. Around 25 million square feet of net additional leasable area is projected in the next fiscal period, mostly from acquisitions, with under-construction developments contributing the rest. The new REIT preparing to list is anticipated to add roughly 15-17 million square feet to the total leasable area, bringing the sector-s overall leasable space to about 190-195 million square feet.
Occupancy rates have improved steadily, rising from 88.4% in late 2024 to 91.5% by September 2025. Crisil expects occupancy to reach 92-93% by fiscal 2027, supported by continued demand from global capability centres, banking and financial services companies, and flexible workspace operators. Additional demand is expected from office conversions in special economic zones, easing inflation, and moderate interest rates, which could further benefit retail segments in major cities.
Profit margins, measured by EBITDA, have consistently stayed around 70%, reflecting strong operational efficiency. These margins are expected to remain stable in the near term, supporting healthy cash flows for acquisitions and operations. While overall debt may rise to fund new asset purchases, equity inflows from REITs with higher leverage are expected to balance funding needs.
Crisil notes that the sector-s loan-to-value ratio is likely to remain controlled, around 26-28% by fiscal 2027, compared with 25% as of September 2025. The combination of long-term commercial real estate assets, geographic and industry diversification, and backing from established sponsors contributes to risk mitigation. Nevertheless, potential impacts from global economic slowdowns, geopolitical developments, or large debt-funded acquisitions will need to be carefully monitored.
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