Blueprint to extract gold from prime PSU real estate

The government has signalled a shift towards market-linked management of its underused real estate assets by setting up real estate investment trusts or Reits to monetize land and property holdings of public sector enterprises.

- Madhurima Nandy

The proposal, announced by finance minister Nirmala Sitharaman in her budget speech on Thursday, is aimed at unlocking long-term value from mature public land holdings, while improving balance sheets at state-owned companies.

Expanding remit

By positioning Reits as a key mechanism for asset monetization, the budget reinforces their growing role in India's infrastructure and urban financing ecosystem, the Indian Reits Association (IRA) said. Dedicated CPSE REITs can accelerate capital recycling, expand access to high-quality, income-generating assets, and offer investors exposure through transparent and regulated instruments.

Reits pool income-generating real estate assets such as office parks and shopping malls, allowing investors to earn a share of rental income without owning the properties directly. Under Securities and Exchange Board of India (Sebi) regulations, at least 80% of a Reit's assets must be completed and income-producing.