Surging Demand for REITs Boosts India's Real Estate Market Amidst GCC Hiring Spike

A Jefferies report highlights growing demand for REITs in India, driven by hiring from Global Capability Centres and increased return-to-office trends. Despite current market challenges, REITs outperform other sectors due to strong office demand and improving fundamentals, with experts predicting continued growth and potential upticks in rents and valuations.

In an illuminating report, investment giant Jefferies has said that India is experiencing a burgeoning demand for Real Estate Investment Trusts (REITs), largely fueled by strong hiring from Global Capability Centres (GCCs) and an uptick in return-to-office mandates. Corporations are significantly gravitating towards REITs, according to the multinational firm.

Backing these assertions with robust data, Jefferies pointed out that the office vacancy rate fell by 1.5 percentage points in 2024, though it remains 5 percentage points higher than the 2019 low. The year marked a record high office absorption at 50 million square feet, with demand surpassing supply by 10 percent. The outlook for interest rates remains favorable for REIT performance moving forward, the report added.

Office REITs have notably outperformed the broader property sector and the market, jetting ahead of the BSE Realty Index by 22-31 percentage points in 2025. Jefferies cited persistent office demand, falling yields, and sound valuations as key factors for this resilience amid a challenging market landscape. "Valuations are hovering at long-term average discounts, and potential rent hikes due to supply tightening could spark favorable surprises," the report concluded. REITs, entities known for owning and operating real estate to drive income, are seen as increasingly strategic for investors eyeing growth.

(With inputs from agencies.)