Small and Medium Real Estate Investment Trusts (SM REITs) Market Dominated by Mumbai, Delhi NCR, and Bengaluru: JLL Report

The real estate market in India is booming, with over 328 million sq ft of office assets valued at around $48 billion being deemed Small and Medium (SM) Real Estate Investment Trusts (REITs)-worthy. According to a report by JLL – Property Share, Mumbai, Delhi NCR, and Bengaluru are leading the SM REIT market, representing 73% of worthy assets in the top seven cities’ office sector.

The top seven cities with SM-REIT worthy assets include Mumbai, Delhi NCR, Kolkata, Chennai, Pune, Hyderabad, and Bengaluru. Mumbai leads the pack with a $18.7 billion opportunity for SM REITs, followed closely by Delhi NCR. Both cities offer well-managed portfolios of small and mid-sized leased assets under a strata ownership model.

Gurugram dominates the Delhi NCR office segment, capturing 61% of the SM REIT market. Bengaluru, known for its strong tech-driven demand, offers a significant opportunity for SM REITs, with the SM REIT opportunity standing at just around 1/4th of the total Grade A office stock in the city.

Hyderabad is also emerging as a prime destination for SM REIT investments, with assets in the Hitec and Gachibowli corridors accounting for 84% of the available potential, representing a $3.7 billion opportunity.

The fractional ownership market in India is witnessing exponential growth, currently valued at around $500 million and expected to surpass $5 billion Assets Under Management (AUM) by 2030. SM REITs are proving to be an enticing choice for retail investors, offering a professionally managed platform for investing in rent-yielding assets.

Overall, the SM REIT market in India is poised for significant growth, offering lucrative opportunities for investors in the top seven markets. With the introduction of SM REIT regulations by SEBI, a new asset class has been introduced to the retail and institutional investor universe, further advancing the securitization of real estate assets.