May build yield asset pipeline
Sobia Khan & Kailash Babar
Bengaluru | Mumbai: The government’s move to monetise state-owned real estate through Real Estate Investment Trusts (REITs) is expected to reshape India’s asset monetisation landscape, potentially unlocking billions in idle government property while expanding the country’s fast-growing yield-oriented investment market.
The initiative may help deepen capital markets, improve public sector balance sheets, and create a new pipeline of income-generating commercial assets for domestic and global investors, experts said.
The shift forms a key highlight of the budget, where finance minister Nirmala Sitharaman proposed setting up dedicated REIT structures to monetise real estate assets owned by Central Public Sector Enterprises (CPSEs).
“India’s REIT ecosystem has played a critical role in institutionalising the commercial property sector,” said Alok Agarwal, chairman, Indian REITs Association. “High-quality office portfolios backed by multinational tenants, long-term lease structures and strong occupancy levels have helped deliver consistent distribution growth. The entry of CPSE-backed REITs could further broaden the asset base and enhance market depth, particularly by bringing unique government-owned commercial and infrastructure-linked properties.”
The move reflects a strategic policy transition, from treating land and buildings as static holdings to transforming them into revenue-generating platforms that can attract long-term institutional capital.
“CPSEs spanning railways, ports, oil companies and banks are estimated to hold real estate worth over ₹10 lakh crore,” said Bhavik Vora, partner, Grant Thornton Bharat. “Channelled through REITs, these assets could deliver steady rental income and yield-focused returns, mirroring the success of India’s listed REIT ecosystem.”
Channelising such assets through REITs will allow CPSEs to unlock capital, strengthen balance sheets, and recycle funds into core operational and infrastructure expansion activities.
Vora, however, underlined that profitability post-REIT will hinge on a hard commercial truth—scale and rental quality matter more than portfolio breadth.
The proposal also comes at a time when India’s REIT market is displaying strong growth and investor acceptance since its inception in 2019.
