India’s Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT) market could unlock an additional investment pool of INR 11.6 trillion over the next five years, with total assets under management (AUM) expected to exceed INR 20 trillion by 2030, according to a report released by Avendus Capital. 
The report, published in Mumbai this week, examines the growing role of infrastructure and real assets in investment portfolios amid a higher interest-rate environment. It notes that REITs and InvITs are increasingly being viewed as stable income-generating instruments with inflation-linked characteristics. 
According to the report, domestic institutional investors are expected to emerge as a major source of capital for the sector. Domestic mutual funds are projected to invest approximately INR 4.6 trillion by 2030, while insurance companies could deploy around INR 3.2 trillion. Domestic pension funds are also expected to increase their participation, contributing an estimated INR 2.2 trillion over the same period. 
Avendus Capital estimates that domestic institutional investors have utilised only 7.5% of their existing regulatory investment limits for REITs and InvITs, indicating an incremental investment opportunity of nearly INR 7 trillion within the current framework. 
On the supply side, the report identifies roads, office assets, retail properties, power transmission networks, renewable energy assets, telecom infrastructure and logistics facilities as key sectors expected to drive growth. The total addressable market (TAM) across these segments is projected to double from approximately INR 10 trillion in 2026 by the end of the decade. 
The report also highlights the relatively low penetration of REITs and InvITs in India. At approximately 1.5% of gross domestic product (GDP), the market remains considerably smaller than mature markets such as the United States, Australia, Singapore and Japan, where business trusts account for between 5% and 12% of GDP. 
Gaurav Sood, Managing Director and Head of Equity Capital Markets at Avendus Capital, stated that India’s REIT and InvIT sector is currently in the ninth year of what he described as a multi-decade growth journey. He noted that the market presently comprises 32 listed trusts with a combined AUM of INR 10 trillion and a market capitalisation of INR 5 trillion. He added that stable income-generating structures such as REITs and InvITs are emerging as significant long-term opportunities within India’s capital markets. 
Gaurav Arora, Managing Director and Head of Infrastructure & Real Assets Investment Banking at Avendus Capital, said the country was entering an important phase in the evolution of real asset financing. He noted that the expanding pipeline of infrastructure and real estate assets requires substantial long-duration capital, while REITs and InvITs provide a mechanism for monetising cash-generating assets and recycling capital into new development opportunities. He estimated that existing and emerging real asset sectors could add nearly INR 10 trillion in AUM over the next five years. 
The report also proposes a broader framework for evaluating REITs and InvITs, suggesting that investors should assess equity internal rate of return (IRR) rather than relying solely on distribution yields. According to the study, equity IRRs generally trade at a premium of 200 to 700 basis points over the 10-year government security yield across sectors under long-term base-case assumptions. 
Additional capital inflows are expected through passive exchange-traded funds (ETFs), which could contribute more than INR 240 billion if allocations to the asset class increase by 2%. Potential inclusion in global indices could attract more than INR 1 trillion over the next five years, while foreign institutional investors, retail investors, high-net-worth individuals and family offices are collectively expected to invest an additional INR 1.5 trillion by 2030. 
The report concludes that these factors are likely to support a sustained expansion of capital allocation towards India’s REIT and InvIT market over the remainder of the decade.