Leasable Office Space in Top 7 Indian Cities Reaches 526.3 Million Sq. Ft. with Rs. 4.5 Lakh Crore Value

The total leasable office space across the top 7 cities in India currently stands at 526.3 million square feet, with a total value of Rs. 4.5 lakh crores, according to a report by real estate consultancy firm Westian titled REITs: Reshaping India's Commercial Space.

The report highlights that these prime office spaces are expected to be listed on stock exchanges through Real Estate Investment Trusts (REITs). However, India's REIT market is still in its early stages compared to major international financial markets. As of now, only four REITs are listed on the stock exchanges, covering 125 million square feet in the retail and office sectors, with three of them focusing on office properties (110.7 million square feet).

REITs are becoming increasingly popular among both foreign and domestic investors, driven by attractive dividends. Among the top cities, Hyderabad leads with the highest proportion of REIT-eligible office space, accounting for 74% of the total office space. Kolkata, on the other hand, has the lowest share, with only 24% of its office space eligible for REITs.

The seven major cities combined have a total of 884.1 million square feet of Grade A office space, and of this, 526.3 million square feet, valued at Rs. 4.5 lakh crore, has the potential to be converted into REIT-eligible properties.

Cities like Hyderabad, Bangalore, Chennai, and Delhi-NCR have up to 60% of their office spaces eligible for REITs, while Mumbai and Pune have up to 50%. The growth of REITs largely depends on the supply and demand for Grade A office spaces.

Since their inception in 2014, following significant policy changes, REITs have gained momentum in India. The first REIT was listed in 2019, marking a key milestone in the country’s commercial real estate investment landscape.

REITs Registered in India

• Brookfield India Real Estate Trust
• Embassy Office Parks REIT
• Mindspace Business Parks REIT
• Nexus Select Trust