The Reserve Bank of India’s proposed framework permitting bank financing to Real Estate Investment Trusts (REITs) could unlock refinancing opportunities of nearly Rs. 26,000 crore for office REITs over the medium term, corresponding to outstanding NCD maturities from FY2027 onwards. At a gross loan-to-value (LTV) ratio of 40%, the proposal could also create an incremental funding opportunity of Rs. 75,000-80,000 crore for future acquisitions and portfolio expansion.
The proposed framework comes at a time when India’s office REIT market has grown into a Rs. 2.4 lakh crore asset class, with REIT-owned assets accounting for 16% of the Grade A office stock across the country’s top seven office markets, up from around 10% a year ago. The markets comprise Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR) and Pune. The recent listing of Bagmane REIT in May 2026, with a gross asset value (GAV) of approximately Rs. 0.4 lakh crore, has further expanded the scale of the market.
With a comfortable gross LTV of around 24%, well below the proposed regulatory ceiling of 49%, office REITs remain well-positioned to support the next phase of growth in India’s commercial real estate sector.
Despite global macroeconomic headwinds, office leasing activity in India remained buoyant in FY2026. Occupancy levels remained above 80% across major office markets, with Bengaluru and MMR reporting occupancy levels of over 90%.
Key Highlights:
- Office REITs account for 16% of Grade A office stock across Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR) and Pune, up from around 10% a year ago
- Gross asset value (GAV) of office REITs has crossed Rs. 2.4 lakh crore as of March 2026
- The listing of Bagmane REIT in May 2026, with a GAV of approximately Rs. 0.4 lakh crore, has further enhanced the scale of the office REIT market
- Office REIT portfolios have expanded nearly eight-fold over the last six years
- RBI’s proposed lending framework could unlock refinancing opportunities of nearly Rs. 26,000 crore over the medium term
- Potential incremental funding opportunity of Rs. 75,000-80,000 crore at a gross LTV of 40%
- Consolidated gross LTV of listed office REITs remained comfortable at around 24%, significantly below the proposed regulatory ceiling of 49%
- Occupancy levels remained above 80% across major office markets, with Bengaluru and MMR reporting occupancy levels of over 90%