India Grade-A warehousing: the asset yields 7.5–8%, but what you can buy pays 5.8% — part of it your own capital back
Composite-board score: 6.1 · Where it is strong: Net cash flow, Hands-off degree · methodology
India's warehousing story has two layers that must not be blended. The asset layer is genuinely strong: Knight Frank's guide puts Grade-A warehousing yields at 7.5–8%, Q1 2026 leasing hit 19.3M sq ft across the top eight cities (+15% year on year), and total stock is 568M sq ft. But individuals cannot buy the asset layer — it is institutionally developed and held. What individuals can buy is the listed wrapper: NDR InvIT (India's first perpetual warehousing InvIT, NSE-listed), whose FY2026 distributions were ₹7.33–7.45 per unit (exchange filings reach this site via relays quoting both figures; both are printed, the higher is not cherry-picked) — about a 5.8% cash distribution rate at the roughly ₹126 market price. The mandatory companion fact: a large share of that distribution is return of capital (about 27% in Q1 FY2027, about 46% in Q1 FY2026), not income; unit NAV stands at ₹142.03. Quoting only "India warehousing 7.5–8%" or only "5.8% distributions" both mislead — the first you cannot buy, the second includes your own principal. The entry is rated do, on conditions — the condition being that the reader finishes the two-layer arithmetic. The portfolio itself is sound: about 99% occupancy, an 11.3-year weighted-average lease, LTV below 15%. Note also that Grade-A vacancy (13%) runs above Grade-B (9.2%) — institutional speculative supply arrived first, and "Grade A" is not a no-risk label.
In short: four lines first
Listed units at market (about ₹126/unit); direct assets are institutional (not open)
5.8%（NDR InvIT cash distribution rate (at market price; return-of-capital warning)）
Very hands-off (listed route)
Misreading return of capital is the reason this entry exists: treat the 5.8% cash rate as a yield and the true economic return must subtract the returned principal and add NAV movement (₹142.03; NAV CAGR about +6.05% over FY2024–26). The composition moves quarter to quarter (27% vs 46%), so it is a number to keep watching, not a one-time footnote.
The numbers that matter
Why we think it makes money
Demand is documented in transaction data: warehousing leasing keeps expanding (72.5M sq ft in 2025, +29%), with Grade-A taking 63% of leasing — e-commerce, 3PL and manufacturing together, in one of the few Indian property categories with continuous institutional data.
The InvIT wrapper slices an institutional portfolio into individually purchasable units: NDR's portfolio spans 17 cities and 22.17M sq ft at about 99% occupancy with long leases and low leverage — and as "the listed proxy for Indian warehousing", its filings are complete and checkable.
The two-layer yield gap is itself the information: the roughly two points between the asset layer (7.5–8%) and the individual layer (5.8%, including capital return) are the sum of management fees, structural costs and the listing discount — spelling that out is the difference between this page and "India warehousing at 8%" marketing.
How to actually get in
- Listed route: buy NDR InvIT units on the NSE through a broker or the FPI channel (market price about ₹126/unit, Q3 FY2026 basis). The trust filed a ₹750 crore public offer with SEBI in Aug 2026 to convert from private-listed to public InvIT; liquidity and lot rules follow the rules in force at entry.
- Direct ownership of Indian warehousing: institutional tickets and foreign-investor rules make it unrealistic for foreign individuals; it is not a route in this entry.
What it costs, what it earns
Entry amount: Listed units at market (about ₹126/unit); direct assets are institutional (not open)
How much work for you: Very hands-off (listed route)
- The composition cost of distributions: with return of capital at 27–46% in recent quarters, part of the cash distribution is principal coming back — the most overlooked holding cost, to be checked against the trust's annual tax documents year by year.
- Transaction costs: brokerage, FPI channel costs where applicable, and rupee conversion.
- Tax: each distribution component (interest, dividends, rent, capital return) carries its own treatment and withholding — see the tax lines.
Basis: this site uses full-cost net returns only — income minus vacancy, management, maintenance, taxes and insurance, then financing interest, with entry costs in the denominator. See the methodology。
Identity & tax
Status (residency / citizenship)
This asset does not count toward the channel No status channel
Threshold: —
买 InvIT 单位是组合投资（FPI 通道），不产生任何印度居留或签证资格；印度没有面向被动房地产投资者的投资移民通道。直接持有印度仓储资产对外资个人亦不现实（机构级门票与外资规则）。
Source: 印度证券交易委员会（SEBI）InvIT 规则；FPI 框架
Tax (investor level)
InvIT 分派按构成部分分别计税：利息、股息、租金与资本返还的税性各不相同——这正是不能只看现金分派率的税务面理由。
- 分派构成逐年由信托披露：利息部分、股息部分、租金部分与资本返还（摊还出资）的预提与税率各不相同，非居民按各部分适用口径预提。
- 资本返还部分不是收益，是本金的退回——把它计入「收益率」会在税务与经济两个层面同时算错。
- 单位买卖的资本利得按印度规则纳税（持有期与居民身份决定口径）。
Double-tax treaties: 印度与新加坡有全面税收协定；InvIT 分派各构成部分的协定待遇逐项适用，以信托年度税务文件为准。
Source: NDR InvIT 年度分派税务文件；印度所得税法 InvIT 条款
This section is general information only — not immigration or tax advice. Program rules change frequently; before acting, rely on the official texts and a licensed adviser.
Risks: what could go wrong
What we have not verified yet
The following key figures have not yet been verified; the reason is noted for each item.
- Reconciling ₹7.33 vs ₹7.45: both figures come from exchange filings via different relays and are printed side by side; NDR's formal distribution announcement to the NSE governs — check the latest one before dealing.
- The post-conversion (₹750 crore public offer) unit structure and liquidity: filed, not yet determined.
FAQ
- After stripping out return of capital, how much "real" income is left in the 5.8%?
- On recent composition, roughly: at 27–46% return of capital, the income part equates to about a 3.1–4.2% cash rate, to which NAV movement must be added (NAV CAGR about +6.05% over FY2024–26, valuation-driven and not extrapolable). The honest read is the three numbers together — cash rate, capital-return share, NAV change; any pitch quoting only the first is missing the other two.
- Why not buy the warehouses directly and take 7.5–8%?
- Because that layer is not open to individuals: Grade-A warehousing is developed and held by institutions at ₹-crore-scale tickets, and direct real-estate ownership channels for foreign individuals are not realistic. The 7.5–8% is the asset layer's pricing, not a quote to you.
- The price (₹126) is below NAV (₹142) — is it cheap?
- A discount is not by itself evidence of cheapness: NAV is a valuation-basis number, and listed InvITs/REITs trade at persistent discounts for liquidity, management and distribution-composition reasons. NDR is also mid-conversion from private-listed to public. Answer the distribution-composition and NAV-growth questions first (see the primary metric and the risks) before treating the discount as a reason.
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