2023 Witnessed Increased Capital Raising Through REITs and InvITs in India, 2024 Could go Higher

The recent years have seen a remarkable surge in fundraising through REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) in India. In 2023, the funds raised through these avenues witnessed a tenfold increase, reaching ₹11,474 crore. This growth is a result of favorable measures by the Securities and Exchange Board of India (SEBI) and the attractive returns these instruments offer.

Future Outlook: Anticipated Growth in 2024

Looking forward, 2024 is expected to be a significant year for the mobilization of funds through REITs and InvITs. This optimism is driven by various factors, including the expected reduction in interest rates due to a projected decrease in inflation, and the introduction of policies to encourage investment, such as tax incentives and relaxed investment norms.

Insights from Industry Experts

Many experts in this field believe that the first half of 2024 might see a decrease in interest rates due to anticipated lower inflation rates. Such an environment could be beneficial for investors seeking long-term opportunities in REITs and InvITs.

Historical Fundraising Data

Data compiled by Prime Database.com revealed that the amount raised by REITs and InvITs in 2023 stood at ₹11,474 crore, a significant increase from the ₹1,166 crore recorded in 2022. Prior to this, ₹17,641 crore was raised in 2021 and ₹29,715 crore in 2020.

Global Popularity and Domestic Growth

REITs and InvITs, while new to the Indian market, have been popular globally due to their potential for lucrative returns and capital appreciation. A REIT typically comprises a portfolio of leased-out commercial real estate assets, whereas an InvIT includes infrastructure assets such as highways. In India, these investment vehicles have seen tremendous growth since their introduction 7-8 years ago, with 23 registered InvITs and 5 REITs currently managing assets over ₹30,000 crore.