Budget 2026: Govt Plans Dedicated REITs to Monetise CPSE Real Estate Assets

The Union Budget 2026 has placed renewed focus on unlocking the value of government-owned land and buildings, with Finance Minister Nirmala Sitharaman announcing a proposal to create dedicated Real Estate Investment Trusts for Central Public Sector Enterprises. The move is aimed at accelerating the monetisation and recycling of large real estate assets held by CPSEs across India.

Presenting the Budget in the Lok Sabha, the finance minister said REITs have emerged as an effective and transparent tool for asset monetisation. By channelising income-generating properties into professionally managed investment trusts, the government aims to unlock capital tied up in underutilised land and buildings, while continuing to retain strategic ownership.

CPSEs collectively hold vast real estate portfolios, including office buildings, townships, warehouses and surplus land parcels, much of which remains underleveraged. The proposed dedicated REIT structure is expected to help convert these assets into revenue-generating instruments, improving balance sheets and freeing up capital for core operations and new investments.

India’s REIT market has gained steady traction over the past few years, with listed trusts largely focused on office and retail assets. The Budget proposal is likely to expand the scope of the REIT ecosystem by bringing government-backed assets into the market, potentially improving scale, liquidity and investor participation.

For the real estate sector, the move could create a new pipeline of high-quality commercial assets, while offering long-term institutional investors access to stable rental income streams. Market participants believe dedicated CPSE REITs could also set valuation benchmarks and improve transparency in public asset monetisation.

From a policy perspective, the proposal aligns with the government’s broader asset monetisation programme, which seeks to unlock value from existing infrastructure rather than relying solely on fresh capital expenditure. By recycling real estate assets through REITs, CPSEs can generate funds without outright asset sales, ensuring sustainable value creation.

While details on structure, asset selection and timelines are awaited, the announcement signals a clear intent to deepen India’s REIT market and improve returns from public sector real estate. If implemented effectively, dedicated CPSE REITs could become a key pillar in India’s long-term infrastructure and urban development strategy.