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:

جیسے جیسے مارکیٹ پختہ ہوتی جا رہی ہے، Avendus Capital کا مشورہ ہے کہ سرمایہ کاروں کو اپنا مرکز سادہ تقسیم کے منافع (distribution yields) سے ہٹا کر "equity IRR" پر منتقل کرنا چاہیے۔ تاریخی طور پر، یہ پیمانہ 10 سالہ G-Sec کے مقابلے میں 200–700 bps کے پریمیم پر رہا ہے، جو ان آلات کو طویل مدتی پورٹ فولیو کے لیے افراط زر سے محفوظ اور آمدنی پیدا کرنے والے پرکشش ذرائع بناتا ہے۔

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