Micro-Zoning, RR proposal: A reform opportunity

Mumbai: The government’s proposed introduction of micro-zoning and differentiated Ready Reckoner (RR) rates marks a significant shift in the way property valuations are determined across the state. The initiative, which seeks to assign distinct RR rates to high-rise buildings, slums, chawls and redeveloped properties within the same locality, has largely been welcomed by the real estate sector. Industry stakeholders, however, caution that the reform’s effectiveness will depend less on its...

min read

Micro-Zoning, RR proposal: A reform opportunity

Mumbai: The government’s proposed introduction of micro-zoning and differentiated Ready Reckoner (RR) rates marks a significant shift in the way property valuations are determined across the state. The initiative, which seeks to assign distinct RR rates to high-rise buildings, slums, chawls and redeveloped properties within the same locality, has largely been welcomed by the real estate sector. Industry stakeholders, however, caution that the reform’s effectiveness will depend less on its intent and more on the framework governing its implementation. The proposal comes at a time when property markets in major urban centres, particularly Mumbai Metropolitan Region (MMR), are witnessing increasingly diverse development patterns within the same neighbourhoods. Experts argue that uniform RR rates often fail to capture the substantial variations in infrastructure quality, redevelopment status, accessibility and market demand that exist even within small geographical pockets. Real estate professionals believe that a micro-zoning approach could help bridge the gap between official property valuations and actual market realities. More accurate valuation mechanisms can improve transparency in transactions, provide a fairer basis for stamp duty calculations and create a more nuanced framework for urban planning. Experts’ Comments Kamlesh Thakur, President, NAREDCO Maharashtra and Co-Founder & Managing Director, Srishti Group, believes the concept has merit but warns that the execution framework will determine whether the reform succeeds or creates fresh challenges. “The concept of micro-zoning and differentiated Ready Reckoner rates has the potential to make property valuation more reflective of local market realities and development potential. However, its success will depend entirely on the framework adopted for implementation. Unless there is a clear, transparent and objective policy with well-defined parameters, the introduction of micro-zoning could lead to increased discretion at the administrative level, resulting in uncertainty and inconsistent outcomes,” he said. According to Thakur, valuation systems that allow excessive room for subjective interpretation can generate disputes, create inconsistencies in assessments and undermine business confidence. His concerns reflect a broader industry apprehension that redevelopment projects—already burdened by lengthy approval processes and rising costs—could face additional uncertainty if valuation criteria vary across administrative jurisdictions. Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory, views the proposal as a logical evolution of property valuation practices, particularly in rapidly transforming urban markets. “The move towards differentiated Ready Reckoner rates through micro-zoning is a progressive step, as property values can vary significantly within the same locality depending on factors such as infrastructure, accessibility, building quality and surrounding development. If implemented effectively, it has the potential to make property valuations more realistic and aligned with actual market dynamics,” he said. Transparency, Methodology At the same time, Agarwal emphasized that transparency and data quality will be critical to ensuring credibility. “However, the success of this initiative will depend on the transparency of the methodology, the quality of data used, and the consistency of its application across micro-markets. Buyers, investors, and developers value clarity and predictability in valuation mechanisms. A well-defined and publicly accessible framework will be essential to avoid ambiguity, strengthen market confidence, and ensure that the new system delivers greater accuracy without creating uncertainty in transaction pricing or investment decisions,” he noted. Uniformly Implemented Echoing similar concerns, Dhruman Shah, Promoter, Ariha Group, said the government must ensure that the system remains easy to understand and uniformly implemented. “The move towards micro-zoning reflects an effort to modernize property valuation and make it more representative of actual market conditions. However, it is important that the system remains simple, transparent and uniformly enforced across regions. If multiple layers of interpretation emerge during implementation, it could lead to disputes and delays, particularly for redevelopment projects that already involve complex approval processes. Industry consultation at every stage will help create a practical and effective framework,” Shah said. As the state explores one of the most significant changes to its property valuation mechanism in recent years, the industry appears broadly supportive of the objective. Yet the consensus remains clear: the success of micro-zoning will depend on transparency, consistency and stakeholder consultation. Without these safeguards, a reform intended to improve valuation accuracy could inadvertently introduce new layers of uncertainty into an already complex real estate ecosystem.

REIT market surges ahead, says report

Bhalchandra Chorghade
Apr 3
3 min read

Mumbai: India’s Real Estate Investment Trust (REIT) market is witnessing strong momentum, positioning itself as a compelling investment avenue both domestically and in comparison with Asian peers, according to a latest report by ANAROCK.

Titled ‘India REITs: Taking a Stride - Building Momentum with Scale & Performance’, the report was released on the sidelines of EXCELERATE 2026, a finclave organised by NAREDCO Maharashtra NextGen. It highlights that India’s REIT sector is rapidly evolving into a mature and high-performing asset class, backed by robust fundamentals, regulatory support and growing investor confidence.

A key development underpinning this growth is the introduction of Small and Medium REITs (SM REITs) in 2025, which has enabled wider retail participation through a fractional ownership model. The report estimates that SM REITs could unlock monetisation opportunities worth Rs 67,000 crore to Rs 71,000 crore, significantly expanding the investment base.

India’s REIT market has also emerged as increasingly competitive within Asia. According to the report, it has already achieved a scale comparable to established hubs such as Hong Kong. Indian REITs have delivered superior five-year price returns of nearly 9 per cent, outperforming several regional counterparts, while maintaining attractive distribution yields in the range of 5–6 per cent

Strong Pillar

Operational performance remains a strong pillar of the sector’s growth. Portfolio occupancy levels across Indian REITs have consistently remained above 90 per cent, with tenants comprising global corporates across sectors such as technology, BFSI, consulting and telecommunications. The report notes that REITs accounted for over 20 per cent of pan-India office leasing activity in the second quarter of FY26, supported by healthy re-leasing spreads and mark-to-market rental upside, indicating sustained income growth potential. Since their respective listings, Indian REITs have delivered capital appreciation ranging from about 12 per cent to over 60 per cent, alongside steady distribution yields.

Tax efficiency is another major factor enhancing the appeal of REITs. Regulatory norms require REITs to distribute at least 90 per cent of their net distributable cash flows, making them particularly attractive to income-focused investors. Additionally, over 65 per cent of REIT distributions are tax-exempt in the hands of investors, significantly improving post-tax returns.

Growth Trajectory

Looking ahead, the report projects a promising growth trajectory for the sector. Currently, only about 32 per cent of India’s REIT-worthy assets are listed, leaving significant headroom for expansion. The report also highlights diversification into emerging asset classes such as logistics parks, data centres, healthcare infrastructure and residential real estate, which is expected to broaden the investment landscape and enhance yield opportunities.

Introduced by the Securities and Exchange Board of India (SEBI) in 2014, REITs were aimed at formalising and democratising real estate investments by offering liquidity, diversification and stable income streams. India currently has five listed REITs spanning premium commercial office and retail assets, collectively managing over 176 million square feet of leasable area. Since the first listing in 2019, the sector has grown steadily, supported by institutional participation and progressive regulatory reforms.

NAREDCO Maharashtra NextGen organised EXCELERATE 2026 as a one-day international conclave to bring together global and domestic stakeholders to discuss the future of real estate investment and financing in India.

Talking about the finclave, Vikas Jain, President, NAREDCO Maharashtra NextGen said, “India’s real estate sector has undergone a remarkable transformation over the past decade. Investor confidence, both domestic and international, is at an all-time high. Platforms like EXCELERATE 2026 will play a critical role in bringing together global and domestic stakeholders to exchange ideas, explore capital partnerships and accelerate the next phase of growth for Indian real estate.”

Dr Niranjan Hiranandani, Chairman Emeritus, NAREDCO Maharashtra, said, “India’s real estate sector is at an inflection point, with urbanization set to rise from 35 per cent to nearly 50 per cent by 2047, fundamentally reshaping demand and development patterns. The industry has already transitioned from reliance on family funding to more institutionalised capital through private equity and REITs and is steadily evolving into a global asset class.”

The conclave featured a series of high-level panel discussions on emerging capital sources, investment strategies and future asset classes, including family offices, private equity, sustainability, data centres, branded residences, and the role of REITs and InvITs in unlocking institutional and retail capital.