India's REIT and InvIT market to witness Rs 11.6 tn in new investments, with AUM doubling to Rs 20 tn by 2030: Avendus
New Delhi, June 16
India's Real Estate Investment Trusts and Infrastructure Investment Trusts market could attract an additional investment pool of about Rs 11.6 trillion by 2030, while assets under management are expected to more than double to over Rs 20 trillion, according to a report by Avendus Capital.
The report, titled "Trust the Structure: REITs, InvITs and the Real Return Imperative", said India's listed real assets ecosystem remains at an early stage despite rapid growth over the past decade.
"In just 9 years, India's REIT and InvIT market has scaled to nearly Rs 10 Tn of assets under management and approximately Rs 5 Tn of market capitalisation. Yet, based on our estimates, the next phase of growth could be substantially larger," the report stated.
According to Avendus Capital, "By 2030, the asset class could be supported by an additional investment pool of approximately Rs 11.6 Tn across mutual funds, insurance companies, pension funds, foreign investors, retail investors and corporate treasuries."
The report further estimated that "REITs and InvITs themselves could surpass Rs 20 tn of assets under management by 2030, supported by growth across existing real estate and infrastructure sectors alone."
It added that the sector also has the potential to create "an annual primary market opportunity exceeding Rs 1 Tn", highlighting the scale of capital formation these investment structures can facilitate.
Avendus noted that India's REIT and InvIT AUM currently stand at around Rs 10 trillion, comprising approximately Rs 2.97 trillion in REIT assets and Rs 7.13 trillion in InvIT assets.
The report said India's business trust market remains significantly underpenetrated compared with mature global markets. While India's REIT and InvIT market capitalisation represents only about 1.5 per cent of GDP, the ratio stands between 5 per cent and 12 per cent in several developed markets.
The report identified strong growth drivers for the sector, including India's infrastructure expansion, rising financialisation of household savings, regulatory reforms and increasing participation from institutional investors.
According to the report, India's domestic long-duration institutional capital pool has utilised only about 7.5 per cent of the available regulatory limits for investments in REITs and InvITs. "Full utilisation could redirect ~Rs 7 Tn worth of additional flows, which is ~2.6x of the current free float market cap of all REITs and InvITs," it said.
The report also highlighted the government's infrastructure development push as a major catalyst for InvIT growth. It noted that India requires massive long-duration capital to support its infrastructure ambitions, with the National Infrastructure Pipeline 2.0 envisaging around Rs 17 trillion of projects between FY25 and FY28.
"India needs infrastructure at a scale that government budgets alone cannot fund; the role of InvITs is critical in the proper recycling and allocation of capital," the report said.
Looking ahead, Avendus said commercial office REITs could grow from an AUM of Rs 2.9 trillion in 2026 to Rs 6 trillion by 2030, while road InvITs could expand from Rs 3.2 trillion to Rs 8.8 trillion over the same period.
"Our belief is that India is still in the early stages of building a deep and institutionalised listed real assets market. As the ecosystem matures, the role of REITs and InvITs within strategic asset allocation is likely to become increasingly significant," the report said.
— ANI
Reader Comments
Interesting projections from Avendus. It's encouraging to see India's infrastructure push being supported by innovative financial structures like InvITs. However, I wonder how much of this growth is sustainable given global economic uncertainties. The regulatory framework seems robust, but execution will be key. 📊
This is exactly what India needs! Our infrastructure deficit is huge, and government alone can't fund it. InvITs are a smart way to channel household savings into long-term projects. But the article says only 7.5% of regulatory limits are used - that's a massive untapped potential. Need more investor education and simpler processes for retail investors. 🙏
I'm cautiously optimistic. The Rs 11.6 trillion projection sounds optimistic but India's infrastructure story is compelling. My concern is about the quality of assets being bundled into InvITs and whether they'll deliver consistent returns. The 5-12% GDP ratio in developed markets suggests room for growth, but we need to ensure proper due diligence. 📉
Finally, some good news for the Indian economy! The National Infrastructure Pipeline 2.0 is ambitious and InvITs can bridge the funding gap. But I wish the government would also focus on making these instruments more tax-friendly for retail investors. Right now, the double taxation on dividends is a deterrent for many small investors. 🇮🇳
As someone who has invested in a road InvIT, I can say the returns have been steady. The idea of recycling capital makes sense - once the road is built, the toll revenue can be securitized
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