India’s listed Real Estate Investment Trusts (REITs) delivered a standout performance in 2025, with unit prices rising between 16 and 28 percent—outpacing many blue-chip stocks and the broader equity market. The sharp appreciation is notable given that REITs are typically viewed as hybrid income instruments driven largely by dividend payouts, with relatively muted price movements compared to equities.

While yields across the four listed REITs compressed by around 35 basis points—from 6.5 percent in 2024 to about 6.25 percent in 2025—the decline mirrors 2023 levels and has not dampened investor appetite. Market participants attribute the surge in unit prices to a broad rerating of REITs amid falling interest rates, improving office market fundamentals, and sustained demand from global capability centres (GCCs), according to a report by moneycontrol.com.

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.

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.