India’s REIT and InvIT Market to Reach ₹20 Trillion AUM by 2030
India's real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) are poised for an unprecedented growth surge, with the market expected to attract ₹11.6 trillion in new investments over the next five years. According to a new report by Avendus Capital, the total Assets Under Management (AUM) for this asset class could double to reach ₹20 trillion by 2030.
Massive Capital Inflow Driven by Domestic Institutions
The report identifies a significant untapped opportunity within India's domestic institutional landscape. Currently, domestic institutional investors have utilized only 7.5% of their existing regulatory limits for investing in REITs and InvITs, leaving a massive ₹7 trillion window for incremental investment.
The primary drivers of this capital infusion will be domestic mutual funds and insurance companies. Avendus Capital estimates that mutual funds are set to deploy ₹4.6 trillion, while insurance firms are expected to contribute ₹3.2 trillion by 2030. Additionally, domestic pension funds are projected to provide a crucial boost with incremental investments of ₹2.2 trillion over the same period.
Structural Drivers and Sectoral Expansion
India’s REIT and InvIT market currently stands at just 1.5% of the country's GDP, highlighting a significant underpenetration compared to mature markets like the US, Australia, and Singapore, where business trusts account for 5% to 12% of GDP.
The growth is supported by a diverse pipeline of monetizable assets. The report expects the Total Addressable Market (TAM) for key sectors—including roads, office spaces, retail, transmission, renewables, telecom, and logistics infrastructure—to double from ₹10 trillion in 2026 to much higher levels by 2030. This evolution allows for the "financialization" of cash-generating core assets, enabling developers to recycle capital into next-generation projects.
New Avenues: ETFs, Global Indices, and Retail Participation
Beyond traditional institutions, several new catalysts are expected to broaden the investor base:
- Passive Investing: The introduction of passive ETF products could bring in over ₹240 billion with just a marginal 2% incremental allocation to the asset class.
- Global Integration: Potential inclusion in global indices could unlock more than ₹1 trillion in capital over the next five years.
- Diverse Investors: Foreign Institutional Investors (FIIs), High Net-Worth Individuals (HNIs), retail investors, and Family Offices are projected to inject an additional ₹1.5 trillion by 2030.
As the market matures, Avendus Capital suggests that investors should shift their focus from simple distribution yields to "equity IRR." Historically, this metric has trended at a 200–700 bps premium over the 10-year G-Sec, making these instruments attractive inflation-protected, income-generating tools for long-term portfolios.
Key Takeaways
- Exponential Growth: India's REIT and InvIT AUM is projected to double from its current ₹10 trillion to ₹20 trillion by 2030.
- Institutional Backbone: Domestic mutual funds and insurance companies will be the largest contributors, expected to deploy a combined ₹7.8 trillion.
- Significant Upside: With current utilization of regulatory limits at only 7.5%, there is a massive ₹7 trillion opportunity for domestic institutional capital to enter the market.