Budget 2026 REIT Push: What It Means for Nexus Select Trust

Budget 2026 Endorses REITs as a Key Monetisation Tool

In a significant move for India's real estate and capital markets, Finance Minister Nirmala Sitharaman, during the Union Budget 2026 address, announced a proposal to establish dedicated Real Estate Investment Trusts (REITs). The primary objective is to accelerate the monetisation of extensive real estate assets held by Central Public Sector Enterprises (CPSEs). This announcement signals strong government validation for the REIT structure, creating positive tailwinds for the entire sector, including established players like Nexus Select Trust.

The Core Announcement and Its Intent

The Finance Minister highlighted that REITs have proven to be an "effective tool" for asset recycling. The proposal aims to create a structured and efficient mechanism to unlock the value of prime land and properties owned by various government entities. For years, these assets have remained underutilised due to bureaucratic hurdles, legacy land use classifications, and coordination challenges, as previously noted in a 2021 CAG report. By channeling these assets into publicly listed REITs, the government intends to attract institutional and retail capital, improve transparency, and generate non-tax revenue.

Unlocking Value from Public Sector Land Banks

CPSEs and statutory bodies like the Indian Railways hold vast tracts of land in prime urban locations across India. For instance, the railways alone have approximately 62,000 hectares of vacant land. The creation of CPSE-backed REITs provides a modern financial instrument to develop and manage these assets professionally. This move is expected to significantly push the government's asset monetisation agenda, which has seen slow progress in the past. The participation of large funds and institutional investors through a regulated REIT framework can overcome the delays that have plagued direct land sales or leasing.

Impact on the Broader REIT Market

The government's initiative is a structural positive for India's nascent REIT market. Currently, the market consists of five listed REITs with a combined gross asset value of over Rs 2.3 lakh crore. The entry of large, government-backed REITs will substantially increase the market's size, depth, and liquidity. This expansion is likely to attract a new wave of domestic and international investors to the asset class, fostering greater price discovery and maturity. Furthermore, a concerted government push will enhance investor education and awareness about the benefits of REITs, such as stable dividend income and portfolio diversification.

Specific Implications for Nexus Select Trust

As India's first and only listed retail-focused REIT, Nexus Select Trust is uniquely positioned in the market. While the budget announcement does not provide any direct fiscal benefit to the company, the indirect impacts are overwhelmingly positive:

• Enhanced Investor Confidence: The government's endorsement of the REIT structure validates the business model and enhances investor confidence in the entire asset class. This can lead to a positive re-rating for well-managed, transparent REITs like Nexus.

• Market Expansion: A larger, more liquid REIT market benefits all participants. Increased investor interest means a wider pool of capital available for existing REITs, potentially lowering their cost of capital for future acquisitions and expansions.

• Competitive Landscape: The new CPSE REITs will introduce competition for investor capital. However, Nexus Select Trust operates in a specialised niche of high-quality shopping malls. The government-backed REITs are more likely to focus on monetising vacant land or existing commercial office spaces, thereby expanding the overall market rather than directly competing in the retail consumption space.

• Benchmarking and Performance: The launch of public-sector REITs will create new benchmarks for performance, governance, and yields. This provides an opportunity for efficient private players like Nexus to showcase their superior asset management capabilities and potentially command a premium valuation.

Investor and Market Outlook

The budget proposal has been received positively by the market, as it signals a clear policy direction that supports capital formation through modern financial instruments. For investors in Nexus Select Trust, this development reinforces the long-term growth potential of the REIT sector in India. The increased focus on asset monetisation through REITs is expected to create a more robust and dynamic real estate investment landscape.

Conclusion: A Structural Tailwind for the Sector

Union Budget 2026's proposal to launch CPSE-backed REITs is a landmark development. While the direct impact on Nexus Select Trust's operations is minimal, the move creates a highly favourable ecosystem. It validates the REIT model, promises to expand the market significantly, and is likely to attract a deeper pool of investor capital. The market will now await the detailed framework and timelines for the creation of these new investment vehicles, which are set to reshape India's real estate investment landscape.