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In a significant shift towards alternative investment avenues, Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have emerged as the favored choice for investors. The fundraising through this route witnessed an impressive 10-fold rise, reaching Rs 11,474 crore in 2023.
The momentum is expected to intensify in 2024 driven by various factors set to reshape the investment landscape. Claravest Technologies co-founder Manaki Parulekar highlighted the potential impact of anticipated rate cuts and upcoming policies promoting investments. With an expected decrease in interest rates in the first half of 2024, the conditions favor investors seeking long-term opportunities in REITs and InvITs.
Data compiled by Prime Database(dot)com indicates a remarkable growth trajectory, with REITs and InvITs collectively raising Rs 11,474 crore in 2023. This surge follows a record low of Rs 1,166 crore in 2022, emphasizing the growing significance of these investment avenues.
REITs, comprising a portfolio of commercial real estate assets, and InvITs, consisting of infrastructure assets like highways, have gained traction in India within the last 7-8 years. With 23 registered InvITs and 5 REITs managing assets worth over Rs 30,000 crore, these investment vehicles are proving to be instrumental.
Harsh Shah, CEO of IndiGrid, emphasized the efforts made by REITs and InvITs in educating investors about their benefits. Regulatory support from the Securities and Exchange Board of India (SEBI) has played a crucial role. Amendments, such as the reduction in lot size and enabling bank lending, aim to simplify investments into InvITs.
REITs and InvITs have become driving forces in Indian investments for several key reasons. The attraction lies in lower interest rates, making these options more financially appealing to potential investors. Government support, including tax breaks and relaxed regulations, further acts as strong incentives. Additionally, the promise of steady and reliable returns, unlike the unpredictable nature of the stock market, makes REITs and InvITs ideal for long-term financial goals such as retirement planning. Beyond personal financial gains, investing in these avenues allows individuals to contribute to the nation's growth story by channeling funds into crucial infrastructure projects.
In conclusion, the spotlight is now on REITs and InvITs as preferred investment vehicles. With SEBI's continued efforts to enhance governance standards and transparency, coupled with the government's emphasis on infrastructure development, these investment options present an appealing prospect for those seeking assured returns and visibility in cash flows.
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