India's real estate sector is positioned for significant expansion, with the market projected to reach $1 trillion by 2030. According to reports from Investing.com India, the sector could potentially evolve into a $5-7 trillion market by India's centennial year of independence. This growth trajectory is supported by economists predicting the sector's contribution to the nation's GDP will swell to approximately 14% by 2030. The sector is currently in a long-term capital expansion cycle that could see rising institutional investor participation over the coming decade.
Real estate and infrastructure investment trusts are poised for explosive growth, with assets under management (AUM) expected to surpass ₹20 lakh crore by 2030. As per Avendus Capital, domestic institutions are set to deploy the bulk of an additional ₹11.6 trillion into these investment vehicles over the next five years. Mutual funds and insurance companies alone are projected to contribute ₹4.6 trillion and ₹3.2 trillion respectively, while pension funds will add another ₹2.2 trillion. Currently, the market comprises 32 listed trusts with a combined AUM of ₹10 lakh crore and market capitalisation of ₹5 lakh crore, with the most recent listing being Bagmane Prime Office REIT in May, which was subscribed almost 25 times. According to The Economic Times, domestic institutional investors have utilised only 7.5% of their existing regulatory limits for investing in REITs and InvITs, implying an ₹7 lakh crore opportunity for incremental investment.
India's Infrastructure Investment Trusts (InvITs) demonstrated strong performance in FY26, with ₹7,719 crore distributed in Q4 alone and cumulative payouts crossing ₹91,000 crore. As reported by The Economic Times, the industry's assets under management grew from ₹6.3 lakh crore in FY25 to ₹7.1 lakh crore in FY26, while market capitalisation increased to ₹2.92 lakh crore from ₹2.20 lakh crore, reflecting approximately 32% year-on-year growth. The sector witnessed significant expansion with three new listings during FY26, taking the total number of listed InvITs to 25, up from five in FY25. With nearly two lakh new unitholders added, the total unitholder base grew by 64%, while InvITs raised ₹1.97 lakh crore through equity compared to ₹1.75 lakh crore in FY25. The industry's gross debt stood at ₹3.35 lakh crore as of March 31, 2026, reflecting continued confidence among investors and lenders.
The supply-side of India's REIT and InvIT market is set for significant expansion, with key sectors expected to double their total addressable market (TAM) by 2030 from ₹10 lakh crore in 2026. As reported by The Economic Times, the report unpacks key REIT and InvIT sectors including roads, office, retail, transmission, renewables, telecom, and logistics infrastructure. FIIs, retail investors, HNIs and Family Offices are expected to invest an additional ₹1.5 lakh crore by 2030, while passive ETF products could bring in over ₹24,000 crore with just a 2% incremental allocation to the asset class. According to Avendus Capital, the report introduces a framework for evaluating REITs and InvITs, highlighting that investors must move beyond distribution yields to equity IRR, which generally trends at a 200-700 bps premium to 10-year G-Sec across sectors from a long-term base case perspective.
Domestic investor participation has been trending higher, contributing to approximately 76% of total institutional investment activity in terms of total deal volume in Q1FY26. As reported by Investing.com India, despite the fact that foreign fund flows into Indian real estate projects have significantly receded in recent quarters due to a weakening rupee, the domestic market has been buoyed by positive growth outlook. The Real Estate (Regulation and Development) Act (RERA) has fortified India's regulatory framework, while rapid urbanisation beyond top metro locations and proliferation of digital technologies are improving consumer access and driving real demand. According to The Economic Times, India's REIT and InvIT market remains significantly underpenetrated at 1.5% of GDP compared to mature global counterparts such as the United States, Australia, Singapore and Japan, where business trusts account for 5% to 12% of GDP. The National Monetisation Pipeline (NMP) 2.0 has further accelerated adoption by providing a structured framework for unlocking value from operational infrastructure assets.
