India’s listed Real Estate Investment Trusts (REITs) have seen a stellar year in terms of price movement with unit prices have moved up in the range of 16-28 percent beating many blue-chip stocks and broader equity market.
The development assumes significance since REITs are considered hybrid instruments driven by dividend pay-outs and generally the unit prices of these trusts do not move as steeply as equities. To be sure, the yields of the four listed REITs have fallen by about 35 basis points from 6.5 percent in 2024 to 6.25 percent in 2025, data compiled by real estate consultant firm Cushman & Wakefield showed. However, 2025’s yields were on par with 2023 yields, data showed.
Mindspace REIT saw the best price performance as its unit value surged 28.5 percent in 2025 while its yield has remained unchanged at 5.9 percent. Brookfield India REIT saw 20 percent appreciation in unit value, however its yield fell from 7.4 percent in 2024 to 6.8 percent in 2025. Nexus Select Trust saw its unit price go up by 20 percent while its yield fell to 5.8 percent. Embassy’s REIT units went up by 17 percent in price terms during 2025 while Yields fell by 40 basis points to 6.1 percent, data showed.
Market experts attribute this surge in REIT prices to a rerating of these instruments in 2025 triggered by lowering interest rates. Generally, lower interest rates are considered tailwinds for REITs because REITs are capital-intensive businesses and they constantly avail loans and debt funding and any decrease in interest rates would make financing cheaper for them boosting the bottom-line.
Market experts expect this outperformance of REITs to continue provided the interest rates continue to hold low.
Sakshi Suri, executive director, Valuation & Advisory Services, Cushman & Wakefield, said that she expects this positive trend to continue, supported by strong office market fundamentals and sustained growth in GCC demand.
Suri said that REIT unit values in India have gone up primarily due to both fundamental growth as well as regulatory changes. Listed office REITs have outperformed BSE Realty Index and other real estate stocks over the past year, driven by strong leasing momentum, rising occupancies and stable cash flows from high-quality office assets.
“Alongside this operational strength, regulatory changes have significantly supported the uptick in REIT’s investors. The reduction in repo rate by the central government by 125 bps over the last year (December 2024 – December 2025) has further supported the fundamentals of REITs by substantially decreasing debt cost of the REIT,” she said.
During 2025, the Reserve Bank of India (RBI) implemented four rate cuts, reducing the benchmark repo rate by a cumulative 125 basis points (bps). While RBI announced 25 bps rate cuts in February, April and December, it had also announced a 50-bps rate cut in June, data showed.
Market observers said that the rise in REIT unit prices in 2025 has clearly stood out especially when compared with the largely range-bound movement seen over the last few years.
“This re-rating reflects stronger fundamentals on the ground. Office leasing has improved occupancies across Grade-A assets and rentals are beginning to move up in key business locations. At the same time global and domestic investors are increasingly viewing REITs as stable income-generating assets that also provide a hedge against inflation,” said a real estate consultant.
Lower interest rates also provide an additional advantage to REITs as their yield spread compared to benchmark interest rates surges. In other words, the outperformance gap in returns of the REIT in comparison to safe heaven government bonds increases making REIT more attractive for investors.
Amar Ranu, Head - Investment Products & Insights, Anand Rathi Share & Stock Brokers Limited, said that the recent rise in REIT unit prices is driven by a combination of structural, macro, and fundamental factors.
“The 125-bps decline in interest rates has lowered discount rates, leading to valuation re-rating and multiple expansion for long-duration cash flows. On the fundamentals side, high occupancies, strong leasing activity in metro markets, and rising demand from large corporates, particularly GCCs, have supported confidence,” he said.
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