Real estate investment trusts (REITs), that rent out office space, are set to expand the leasable area by 25-30% to 190-195 million square feet (MSF) by the next fiscal year.Based on Crisil Ratings’ analysis of five listed commercial office REITs, the expansion will be led by inorganic additions. 16 MSF of the expected 40-45 MSF leasable addition is expected to come from the recent listing of a new REIT, included in the analysis.According to the report, over the past seven years, 75% of the total asset additions of these REITs came through the acquisition of already existing office spaces. The trend is expected to continue as inorganic acquisitions keep REITs away from construction-related risks.“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,” ANI quoted Gautam Shahi, senior director, Crisil Ratings, saying.“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,” he added.Crisil Ratings expects a strong cross-sector demand, enabling REITs to maintain a healthy profit margin of about 70% due to strong occupancy and increasing rent.Despite the high profit margin, asset additions could be funded through debt, as REITs distribute most of the profits to unitholders.However, Crisil expects the overall loan-to-value ratio to remain stable at 26-28% through FY 2028, similar to the March level, as growth in debt is expected to be countered by the growing property values.Right of first offer on assets developed or acquired by sponsors, allowing REITs to have the first right to purchase those properties, will continue to support growth.According to the report, the growth is supported by diversified assets of REITs across sectors and locations, with the top three sectors and top three locations accounting for approximately 70-75% and 60-65% of total leasable area, respectively.