REITs, InvITs Set to Double AUM to ₹20 Trillion by 2030

Gaurav Sood, managing director and head of equity capital markets at Avendus Capital, said the regulatory environment is becoming more conducive and new pools of investor capital are attracting these asset classes. “At a time when investors globally are reassessing portfolio construction amid structurally higher interest rates, stable, income-generating structures such as REITs and InvITs are emerging as one of the most significant long-term opportunities in India’s capital markets,” he said.

There are currently six listed REITs in India, including five office REITs and a single retail REIT. The most recent listing was Bagmane Prime Office REIT in May, which was subscribed almost 25 times and attracted the highest number of investor applications ever for a REIT IPO in the country. The first InvIT IPO, IRB InvIT Fund, listed in May 2017 and focused on toll-road assets.

Gaurav Arora, managing director and head of infrastructure and real assets investment banking at Avendus Capital, said the growing pipeline of monetisable infrastructure and real estate assets requires massive pools of long-duration capital. “REITs and InvITs are uniquely positioned to financialize cash-generating core assets and recycle capital to develop the next generation of projects,” he said.

While several private InvITs are likely to go public in the coming months, not many new REITs are expected to come to the market given the paucity of mature office or retail portfolios. “We will see more additions to existing REITs that will witness growth. Overall, with improved investor education on these asset classes, more pools of capital should come in as it is important to have sticky domestic capital,” Arora said.