REIT trading jumps 400% in 2 years: Alternative Investment boom decoded

If you're looking to grow your wealth with more stability and less daily drama than the stock market, there's a new wave of investments that’s catching attention: REITs and InvITs. These options are increasingly being used by everyday investors to earn steady returns while backing the country’s infrastructure and real estate growth.

 

According to  ICRA Analytics, trading in REITs and InvITs has surged in just the last two years:

 

• REIT volumes rose 400% from FY23 to FY25
• InvIT volumes jumped 128% during the same period
• Value of REITs traded: from ₹11,234 crore in FY23 to ₹31,206 crore in FY25
• Value of InvITs traded: from ₹2,840 crore to ₹6,121 crore

 

That’s a clear sign that more people are buying in—especially individual investors and not just large institutions.

 

So, what are REITs and InvITs?

Think of REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) as mutual funds—but instead of owning stocks or bonds, these invest in income-generating real estate or infrastructure assets. You can buy units of REITs or InvITs on the stock market, just like shares, and earn income from the rent, tolls, or fees they collect.

 

REITs own office buildings, malls, and other commercial real estate.

 

InvITs invest in infrastructure like highways, power transmission lines, and telecom towers.

 

In terms of traded value, public InvITs grew by 115.53 per cent in the last two years while public REITs increased by 177.78 per cent since FY2023.  

 

What’s Driving the Demand?

Reliable Income: These assets typically provide regular payouts, making them attractive for investors looking for yield, especially when bank FDs and savings accounts offer limited returns.

 

Infrastructure and Office Boom: Government policies on infrastructure and office space demand (especially from global firms setting up operations in India) are creating a pipeline of assets for these funds to grow.

 

Market Confidence: Public InvITs saw a 4% rise in market value year-on-year, and REITs rose 10%, showing solid backing from both retail and institutional investors.

 

What the numbers say: 

The volumes of public InvITs traded, which stood at 2735 lakh units in FY23, has increased to 6242 lakh units in FY25, said ICRA. On a year-on-year basis, volumes traded increased by 20.52 per cent from 5179 lakh units in FY24. The volumes of public REITs traded increased from a mere 3273 lakh units in FY23 to 16,350 lakh units in FY25. On a year-on-year basis, it grew by 230.10 per cent from 4953 lakh units in FY24.

 

The public InvITs’ traded value stood at Rs 6121 crore in FY25 as against Rs 2840 crore in FY23; while REITs was at Rs 31,206 crore in FY25 as compared with Rs 11,234 crore in FY23. On a year-on-year basis, InvITs’ traded value grew by 14.41 per cent from Rs 5350 crore in FY24 while that of REITs increased by 157.47 per cent from Rs 12,120 crore in FY24, as per ICRA.

 

The total number of unitholders in both these instruments put together increased by 8.23 per cent at 67.23 crore in FY25, as against 62.12 crore in FY24. There are currently five InvITs and four REITs which are publicly traded.

 

Should you invest?

REITs and InvITs offer a balance of income and potential appreciation—but they are not risk-free. Market movements, interest rate changes, and occupancy levels in properties can affect returns. However, for long-term investors looking to diversify beyond traditional stocks and mutual funds, these instruments can offer:

 

• Quarterly income
• Exposure to real assets
• Listed and regulated options with daily liquidity

 

As of now, there are five publicly traded InvITs and four REITs available in India, and more are expected to launch through IPOs as market interest grows.

 

“Market capitalisation of public REITs has grown by a healthy ~10 per cent over FY2024. This remarkable growth underscores renewed institutional and retail investor appetite for commercial real estate-backed securities, supported by uptick in office demand and resilient rental yields. Public InvITs have witnessed ~4 per cent rise in market capitalisation on a year-on-year basis. The consistent uptick points to ongoing confidence in the infrastructure financing ecosystem and growing recognition of InvITs as long-term yield instruments,” said Madhubani Sengupta, Head- Knowledge Services, ICRA Analytics.

 

The year-on-year growth in traded volume, traded value, and market capitalisation for both REITs and InvITs highlights robust market participation and a favourable investment climate. These trends reflect the growing maturity of India’s alternative investment space and its increasing appeal to both domestic and global investors.

 

The government's focus on infrastructure development and asset monetisation plans will provide a steady pipeline of assets for InvITs to expand, while the growing number of GCCs is expected to drive the demand for good-quality Grade A office space, providing scope for commercial real estate to come under REITs. Amid strong market momentum and growing investor interest from both institutional and retail segments, there is expected to be a noticeable uptick in activity in the IPO space for REITs and a trend of private entities transitioning to public market structures, reflecting overall positive sentiment and confidence in capital markets." Sengupta added.