Mumbai: India's Reit and InvIT market is spawning new investment products, with asset and wealth managers launching mutual funds, alternative investment funds (AIFs) and portfolio management services focused on the two asset classes amid a deeper listed market and a growing pool of assets.
What was largely an asset class accessed by buying individual listed Reits and InvITs is increasingly being packaged into managed products catering to investors ranging from retail participants to wealthy individuals and family offices.
This comes as India's Reit and InvIT market expands in size and track record, giving fund managers a broader pool of assets from which to build diversified portfolios.
The real estate and infrastructure investment trusts are poised to double their assets under management to over ₹20 trillion by 2030, as domestic institutions tap only a fraction of their allowed exposure to the asset class, Mint reported last month citing a report by Avendus Capital.
Real estate investment trusts (Reits) own and operate income-generating properties such as office parks, shopping malls and warehouses, while infrastructure investment trusts (InvITs) hold operational infrastructure assets, including highways, power transmission networks and renewable energy projects.
The market, which is in its ninth year, counts 32 listed trusts with a combined assets under management (AUM) of ₹10 trillion, the report added.
Recent launches reflect the shift. Edelweiss Mutual Fund's Edelweiss Nifty REITs & Realty Index Fund is set to open on 5 August, while Neo Wealth and Asset Management, a new-age wealth manager last month launched a ₹1,000 crore dedicated Category III alternative investment fund focused on Reits and InvITs. Alt REIT InvIT Portfolio Strategy (ARIPS) was introduced by the alternative investment platform in September last year.
“This kind of structure, where funds are investing in Reits and InvITs, is new. It is a six-to-12-month phenomenon,” Ashwin Patni, head, wealth management solutions, Julius Baer, told Mint. “We have seen a lot of direct interest from our clients who understand this space and want to take exposure. That feedback has gone to fund managers, and more of them are actively exploring it as products.”
Patni added that institutions and larger family offices are actively creating their own direct portfolios, while retail investors, high-net-worth individuals (HNIs) and smaller family offices are increasingly accessing the asset class through managed funds.
Why REIT, InvIT funds are emerging now
India's oldest Reits and InvITs now have several years of listed performance and distributions behind them, while new issuances have expanded the range of assets available to portfolio managers.
Reits own income-generating real estate such as offices or malls, while InvITs typically hold infrastructure assets such as roads, power transmission lines or renewable-energy projects. Both distribute a portion of the cash generated by their underlying assets to investors.
“The timing reflects the evolution of the asset class,” said Shajikumar Devakar, co-founder of Neo Group. “India's listed and private Reit/InvIT universe has reached a scale where investors can now build diversified portfolios across sectors, sponsors, and infrastructure themes.”
With sponsors increasingly preferring long-term institutional investors on their cap tables some opportunities are difficult for individual investors to access directly. For instance, NEO provides access to funds in privately listed InvITs in addition to publicly listed Reits and InvITs.
Demand is also coming from family offices looking beyond conventional equity and fixed-income investments for assets capable of generating regular cash flows.
“Reits and InvITs are our first preference. We have built a large portfolio in the space and continue to add significantly because we find it attractive on a risk-adjusted return basis, not just for real estate exposure but even compared with other asset classes,” said Sravan Janaswamy, head of fixed income at Gland Family Office, during a panel discussion on safe haven assets during VCCircle Family Office Summit 2026.
Gaurav Agarwal, head – family office & corporate treasury, Oswal Nahar Group, said he had increased his focus on cash-flow-generating investments since 2023. “Today, close to 30% of my portfolio is more into the regular cash-flow stream,” he said.
Liquidity a constraint
However, there are limits to how quickly the managed-product market can scale. While the number and size of Reits and InvITs have expanded, liquidity remains thinner than in mainstream equity markets.
Patni estimates that dedicated portfolios of around ₹800-1,000 crore are manageable in the current market, while significantly larger strategies could face challenges deploying and exiting capital efficiently.
Still, the pipeline of underlying assets is expected to grow as developers and infrastructure sponsors use Reits and InvITs to monetise mature assets and recycle capital into new projects.
In May, Mint reported that after the recent Bagmane REIT momentum, firms such as Cube Highways InvIT, Horizon Parks, and Altius Telecom Infrastructure Trust, among others are joining the listing queue.