Office-focused REITs raise over $1 billion in April-June

Office-focused funds and real estate investment trusts (REITs) raised more than $1 billion in the April-June quarter, driven by rising investor appetite for income-generating commercial real estate, particularly among domestic investors.

According to research by Cushman & Wakefield, office-focused funds and REITs accounted for 51% of the $2 billion raised during the quarter, while multi-sector funds attracted the remaining 49%. Total fundraising was up 1.2 times year-on-year and 3.6 times sequentially.

The report said REITs are increasingly tapping corporate debt markets through non-convertible debentures (NCDs), term loans and commercial paper (CP) to optimise their capital structures. Category II alternative investment funds (AIFs) have also raised multiple rounds of capital in recent quarters, with sovereign wealth funds participating actively.

“Capital allocation is becoming increasingly differentiated across asset classes,” said Somy Thomas, executive managing director-capital markets at Cushman & Wakefield. “While office continues to attract a broad spectrum of investors owing to its maturity, liquidity and stable income profile, we are also seeing growing interest in the data centre segment as investors seek to capitalise on India’s expanding digital infrastructure ecosystem.”

“This diversification of capital is contributing to a deeper and more resilient investment landscape,” said Thomas.

Among key transactions, Nuvama and Cushman & Wakefield Management Pvt Ltd's first real estate fund, Prime Offices Fund, achieved a final close of Rs 4,000 crore.

“Investors are building diversified, long-term exposure to Indian real estate rather than chasing isolated trends,” said Sudarshan Lodha, CEO and co-founder of Strata. “When investors of this scale commit capital to Indian real estate, it signals confidence in the long-term depth and credibility of the market.”

“The next step is to bridge the access gap, so that a broader base of investors can participate in professionally underwritten real estate and structured private credit opportunities,” said Lodha.

Kotak Alternatives also closed its 14th real estate fund at $1 billion with backing from ADIA and NPS Korea, reflecting continued institutional interest in Indian real estate.

At the same time, the growing use of structured debt instruments such as NCDs shows that real estate fundraising is becoming more sophisticated and institutional.

“The liquidity available with NBFCs has created strong competition for AIFs in residential real estate, compressing yields and pushing residential funds towards early-stage funding and mezzanine structures for superior returns,” said Rahul Rajendran, principal, WSB Partners. “We expect income-generating commercial assets to continue attracting capital as REIT and SM REIT structures mature, with many more domestic AIFs likely to launch commercial yield funds.”

REITs, meanwhile, have a constant need for debt refinancing to optimise their cost of funds as their assets mature, and there is strong investor appetite for their bond issuances at current yields. With the RBI set to permit banks to lend to listed REITs later this year, a new avenue of debt financing will open up for a sector that has so far relied largely on bonds.

According to the Indian REITs Association, the country's five listed REITs distributed a total dividend of Rs 2,566 crore in the January-March quarter of FY26, taking cumulative distributions for the financial year to more than Rs 8,900 crore.

As of June 2026, Indian REITs managed more than 203 million sq ft of Grade A office and retail space, with a combined market capitalisation exceeding $25 billion.

Bagmane Prime Office REIT, backed by Bagmane Group and Blackstone, raised Rs 4,760 crore through its Rs 3,400 crore IPO in May 2026 and a pre-IPO placement of Rs 1,360 crore. The report said sustained leasing activity continues to underpin the strong performance of Indian REITs, reflecting resilient demand for high-quality office and retail assets.