The leasable area of India's listed commercial office real estate investment trusts (REITs) is expected to increase by 40-45 million sq ft to 190-195 million sq ft by the end of 2027-28, driven by planned asset additions by existing REITs and the listing of a new REIT, said Crisil Ratings.The expansion, coupled with rising rental income, portfolio diversification and controlled leverage, will support stable credit profiles across the sector, said the ratings agency. Its assessment is based on five listed commercial office REITs, including the platform listed during the current fiscal year.Of the projected increase in leasable area, around 16 million sq ft will come from the recently listed REIT. Crisil expects inorganic acquisition of operational assets to remain the primary growth route for REITs as it helps avoid construction-related risks.The trend has been evident over the years. Between the first REIT listing seven years ago and fiscal 2026, around 75% of total asset additions were achieved through acquisitions. Growth is also expected to be supported by right-of-first-offer arrangements on assets developed or acquired by sponsors through their own platforms.“Addition in commercial office space is accompanied by healthy demand growth from flexible workspace operators, banking, financial services and insurance institutions, and global capability centres cutting across sectors. This, combined with their good location and high quality, will keep occupancy at a stable 92-93% for REITs this fiscal, higher than the occupancy of the overall commercial office sector,” said Gautam Shahi, Senior Director, Crisil Ratings.According to Crisil, sustained occupancy levels along with contracted rental escalations will enable REITs to maintain healthy operating margins of about 70%, supporting cash flow generation.However, as REITs distribute a substantial portion of surplus cash flows to unitholders, future asset additions will largely require debt funding. Despite this, Crisil expects the sector's overall loan-to-value ratio to remain stable at 26-28% through fiscal 2028, broadly in line with levels seen in March 2026. Growth in borrowings is expected to be offset by a corresponding increase in gross asset values.The agency also noted that REIT portfolios remain diversified across sectors and geographies. The top three sectors account for 70-75% of total leasable area, while the top three locations contribute 60-65%. It cautioned that potential disruption from artificial intelligence, a global economic slowdown affecting occupancy levels, or further REIT listings remain key monitorable factors.