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India's Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) market could attract an additional investment pool of about Rs 11.6 trillion by 2030, while assets under management (AUM) 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)
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