NEW DELHI: The union government will intensify efforts to monetize real estate assets of central public sector undertakings (CPSEs) through dedicated Real Estate Investment Trusts (REITs), Finance Minister Nirmala Sitharaman announced while presenting the Union Budget 2026-2027 on February 1, 2026.Highlighting the role of market-based instruments in unlocking value from public assets, Sitharaman said REITs have emerged as a successful asset monetization mechanism and the government will now accelerate the recycling of CPSE-owned real estate through such structures. This move is aimed at improving capital efficiency and generating recurring revenue streams for public companies.
Over the past decade, the government has undertaken multiple initiatives to improve public infrastructure financing, including the introduction and scale-up of Infrastructure Investment Trusts (InvITs) and REITs, which have helped channel long-term institutional capital into infrastructure and income-generating assets.Industry participants said the proposal could significantly deepen the market for listed real estate assets in India. The Indian REITs Association (IRA) said dedicated CPSE REITs would enable faster capital recycling, strengthen the balance sheets of public sector entities and increase investors’ access to stable, income-generating assets through transparent and regulated platforms.
“The proposal reflects a shift from passive ownership to efficient, market-linked asset management, while unlocking long-term value from mature public assets and deploying capital for new infrastructure development,” the association said.
Parveen Jain, president, NAREDCO, said the setting up of dedicated REITs to accelerate the recycling of significant real estate assets of CPSEs is also a welcome step. It will promote efficient use of capital and assets while creating new investment opportunities for the real estate sector. With the government’s continued support for asset monetization, this budget creates a stable, reliable and conducive environment for real estate development.
Ramesh Nair, managing director and CEO of Mindspace Business Parks REIT, said easing foreign individual participation in Indian equities, in addition to dedicated REIT structures for generating income from CPSE assets, strengthens the pipeline for long-term institutional capital in real estate and infrastructure.
Anuj Puri, chairman of Anarock Group, said the idea is to attract institutional capital without diluting ownership control over strategic assets. “This move is in line with the industry’s long-standing demand for simplified REIT taxation and broader participation, including small and mid-sized REITs. However, clarity will only come after subsequent policy announcements set out the operational framework,” he said.
Pradeep Aggarwal, founder and chairman of Signature Global (India), said faster recycling of CPSE real estate assets through REITs, along with continued emphasis on InvITs, would help deepen capital markets, improve liquidity and boost investor confidence in the real estate and infrastructure sectors.
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