For more updates follow Grant Thornton Bharat on WhatsApp
At its core, the government’s renewed push for REITs signals a shift in how real estate is viewed - not merely as a static asset class, but as a balance-sheet lever for capital efficiency, transparency and long-term yield creation.
But sustaining this momentum requires capital recycling, not balance-sheet expansion. REITs are emerging as the chosen financial plumbing.
For the real estate sector, this is a structural nudge. India’s listed REITs already manage assets valued at over INR 1 lakh crore, with office occupancy levels consistently above 85% and rentals showing resilience even through global slowdowns. What Budget 2026 does is expand the addressable universe bringing public-sector assets, and eventually newer asset classes, into the institutional fold.
The strategic implication is significant. Public sector enterprises collectively control some of the most valuable, best-located urban land in India, much of it under-utilised. By moving these assets into REIT vehicles, the government is not just unlocking value; it is setting pricing benchmarks, deepening capital markets, and normalising long-term rental yield as an investable product. This could materially expand India’s REIT universe over the next few years, both in size and asset diversity.
For the real estate sector, this changes the rules of the game. Development-led value creation will increasingly sit alongside and sometimes give way to annuity-led asset management. Developers with stabilised commercial, logistics, retail and even specialised assets like data centres or healthcare facilities will find a clearer exit pathway through REIT listings or asset injections. Balance sheets could become lighter, capital cycles shorter, and risk more evenly distributed between developers and long-term investors.
There is also a geographic implication. As REIT-grade assets become a policy priority, attention will move beyond traditional CBDs in Mumbai, Bengaluru and Delhi NCR. Tier II and Tier III cities are already identified in the Budget’s broader urban and infrastructure thrust and could see a gradual emergence of institutional-grade office parks, logistics hubs and mixed-use developments designed from day one for yield visibility and REIT eligibility.
However, the transition will not be frictionless. REITs reward predictability, not speculative land plays. Lease tenure, tenant quality, ESG compliance, power resilience and urban infrastructure quality will matter far more than notional land value. Developers accustomed to short-cycle, sales-led models will need to build new capabilities such as asset management, reporting discipline, and long-term tenant engagement.
The coming year is likely to be a period of alignment rather than explosion. Expect more asset preparation than listings, more consolidation than greenfield bets. But directionally, the signal is clear. Indian real estate is being nudged gently but firmly towards becoming a yield-driven, institutionally anchored sector.
REITs are no longer a niche capital markets product. They are becoming a structural bridge between public assets, private capital and India’s urban future. Those who adapt early will help define the next decade of real estate development; those who don’t may find the market moving past them.
Eva Tewari, Manager, Real Estate Industry, Grant Thornton Bharat, has also contributed to this article.
This article first appeared in The Times of India on 10 February 2026.
