REITs, InvITs broadening real estate monetisation, reducing risk, says Economic Survey

REITs and InvITs mobilised nearly Rs 14,000 crore in April-November 2025

• REITs and InvITs mobilised Rs 13,893 crore from April to November 2025
• Non-bank credit to commercial sector grew at a CAGR of 43.3% from FY20 to FY25
• SM REITs minimum asset size cut to Rs 50 crore, aiding urban regeneration

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Real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) are helping broaden the base of assets that can be monetised in a significantly de-risked manner, and enhancing sustainability of long-term projects, the Economic Survey 2025-26 released on January 29 has said.

The survey made the note while observing that non-bank credit to the commercial sector significantly outpaced bank borrowings over the same period. Market borrowings from non-banking finance companies, through bonds or otherwise, are the primary fundraising instruments of REITs and InvITs. Citing Securities and Exchange Board of India (SEBI), data the survey said REITs and InvITs, through which asset managers monetise assets such as offices, roads and highways and warehouses, mobilised Rs 13,893 crore in the April-November 2025 period.

"Credit flows from non-bank financial companies (NBFCs) (net of bank borrowings), to the commercial sector grew at a robust compound annual growth rate (CAGR) of 43.3 per cent during FY20 to FY25, significantly outpacing the 25 per cent CAGR recorded for non-food bank credit over the same period," it said.

The landscape has been further strengthened by the growing role of InvITs and REITs, which are enabling long-term institutional capital to participate in infrastructure assets. Together, these developments are helping to mitigate systemic risks by reducing asset–liability mismatches on bank balance sheets, while enhancing the sustainability of financing for long-gestation infrastructure projects, it said.

The Economic Survey also noted the impact of the small and medium REITs (SM REITs) on the asset monetisation framework for various real estate assets as well as urban regeneration. Under SM REITs, the minimum asset size relative to existing REITs has been reduced to Rs 50 crore, from the earlier Rs 500 crore. According to the Survey, SM REITs, "...can support urban regeneration/commercial infrastructure by bringing smaller, stabilised assets into a regulated pooled vehicle".

With investments by mutual funds and specialised investment funds in REITs now considered to be equity investments Janury 1, 2026 onwards, after a notification by SEBI, the Survey said that the new move can help ease participation constraints, and also help increase liquidity in the secondary market.