Understanding the Growth of REITs and InvITs in India
Understanding the Growth of REITs and InvITs in India
In recent years, India has witnessed a significant transformation in its investment landscape with the emergence and growth of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). These financial instruments have become increasingly popular among investors seeking stable returns and diversification opportunities.
What Are REITs and InvITs?
- REITs (Real Estate Investment Trusts): These are companies that own, operate, or finance income-producing real estate across a range of property sectors. Investors can buy shares of REITs, allowing them to invest in large-scale, income-producing real estate without having to buy the properties themselves.
- InvITs (Infrastructure Investment Trusts): Similar to REITs, InvITs pool money from investors to invest in infrastructure projects such as roads, bridges, and power transmission lines. They provide a platform for investors to earn returns from infrastructure assets that generate steady cash flows.
Growth and Popularity
Over the past decade, both REITs and InvITs have gained substantial traction in India:
- Assets Under Management (AUM): The combined AUM of REITs and InvITs has crossed ₹9 lakh crore in just nine years and is projected to reach ₹25 lakh crore by 2030
- Investor Participation: As of June 2025, more than 262,000 individuals have invested in REITs, reflecting growing retail investor interest.
- Distribution to Investors: In the financial year 2024–25, India’s four listed REITs distributed ₹6,070 crore to their investors, marking a 13% increase from the previous year.
- REITs: India currently hosts five publicly listed REITs, including Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, Nexus Select Trust, and Knowledge Realty Trust
- InvITs: There are 27 SEBI-registered InvITs in India, with five of them being publicly listed. These InvITs focus on various infrastructure sectors, providing investors with opportunities to invest in projects like highways, power transmission, and renewable energy.
Market Performance and Outlook
- Office REITs: Office REITs in India have demonstrated strong performance, with all three listed office REITs delivering more than 15% capital appreciation over a 12-month period up to June 2025.
- Infrastructure Sector: The infrastructure sector is poised for significant growth, with private sector capital expenditure projected to rise by 21.5% to reach ₹2.67 lakh crore in the fiscal year 2025–26. This growth is expected to be driven by increased government spending and favorable monetary policies
The future of REITs and InvITs in India looks promising:
REITs and InvITs have emerged as significant investment vehicles in India, offering investors opportunities to participate in the growth of the real estate and infrastructure sectors. With favorable regulatory support, strong market performance, and increasing investor interest, these instruments are poised to play a pivotal role in India’s economic development in the coming years.
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Last Updated on: Saturday, September 6, 2025 6:12 pm by Business Max Team | Published by: Business Max Team on Saturday, September 6, 2025 6:12 pm | News Categories: News
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