India's REIT and InvIT AUM may surpass ₹20 lakh crore by 2030: Avendus Capital

India's market for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) could attract an additional ₹11.6 lakh crore of investments over the next five years, taking total assets under management (AUM) beyond ₹20 lakh crore by 2030, according to a report released by investment bank Avendus Capital.

The report suggests that rising interest rates globally are increasing investor interest in infrastructure and real assets that can provide relatively stable and inflation-protected income streams.

According to the estimates, domestic institutional investors could become the biggest source of fresh capital for the sector. Domestic mutual funds may deploy around ₹4.6 lakh crore in REITs and InvITs by 2030, while insurance companies could invest approximately ₹3.2 lakh crore.

Domestic pension funds are also expected to emerge as a significant investor base, with potential incremental investments of around ₹2.2 lakh crore.

The report noted that domestic institutional investors have so far utilised only 7.5% of their existing regulatory limits for investments in REITs and InvITs, leaving an estimated ₹7 lakh crore of additional investment capacity.

On the supply side, the report projects that the total addressable market across sectors such as office and retail real estate, roads, transmission assets, renewable energy, telecom infrastructure and logistics could double to around ₹20 lakh crore by 2030 from ₹10 lakh crore in 2026.

Despite recent growth, the report said India's REIT and InvIT market remains relatively small compared with developed markets. The asset class currently accounts for around 1.5% of India's GDP, compared with 5% to 12% of GDP in countries such as the United States, Australia, Singapore and Japan.

India currently has 32 listed REITs and InvITs with a combined AUM of around ₹10 lakh crore and a market capitalisation of about ₹5 lakh crore, according to the report.

The study also highlighted new avenues that could broaden investor participation.

Passive exchange-traded funds (ETFs) could bring in more than ₹24,000 crore with just a 2% incremental allocation to the asset class, while potential inclusion of Indian REITs and InvITs in global indices could unlock more than ₹1 lakh crore over the next five years.

Foreign institutional investors, retail investors, high-net-worth individuals and family offices are together expected to contribute an additional ₹1.5 lakh crore by 2030, pointing to a multi-year expansion in capital allocation towards India's real asset investment trusts.

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