2025 was a transformative year for India’s REIT and InvIT markets, marked by landmark regulatory reforms, easing monetary conditions, strong operating fundamentals, and continued expansion of the investable universe. REITs and InvITs benefited meaningfully from the declining interest rate environment during the year. The RBI implemented four repo rate cuts in 2025, cumulatively reducing the policy rate by 125 basis points from 6.50% to 5.25%.

Given the inverse relationship between interest rates and valuations for yield-oriented assets, lower rates reduced borrowing costs, improved distributable cash flows, and supported NAV expansion across REITs and InvITs. Market prices broadly followed the improvement in NAVs, aiding total returns. Besides interest rate cuts, REITs specifically benefited from strong office leasing momentum, which reduced vacancies and improved their revenues.

According to Colliers:

• Grade A office space demand is expected to close at ~70 million sq ft in 2025
  

• New supply is estimated at ~55–60 million sq ft, supporting tightening vacancies
  

• India crossed the milestone of 1 billion sq ft of office stock in Q3 2025, reinforcing its position as one of the largest office markets in APAC
  

Global Capability Centres (GCCs) were the primary demand driver for office leasing, accounting for ~40% of absorption, followed by technology firms, engineering companies, BFSI occupiers, and flex space operators. This demand profile supported stable-to-improving occupancies and rental growth for office-focused REIT portfolios. Consequently, the total returns of the Nifty REITs and InvITs index for the year stood at 25.48% (Nifty 50 gave a return of 11.88% during the same period).

Asset Monetization Plan 2025-30

The Asset Monetization Plan 2025–30 announced in the Union Budget outlines the government’s approach to leveraging existing public infrastructure assets to fund new projects. Building on the earlier National Monetization Pipeline, the plan spans multiple sectors, including roads, railways, power, and telecom.

Industry estimates indicate that monetization activity in sectors such as roads could vary depending on execution timelines and market conditions. These developments are relevant in assessing the evolving landscape for infrastructure-linked trust structures.

Major SEBI Reforms in 2025:

• REIT Reclassification as Equity-Related Instruments: SEBI reclassified REITs as equity-related instruments for Mutual Funds and Specialised Investment Funds, effective January 1, 2026 while InvITs will continue to remain classified as hybrid. This sets the stage for wider mutual fund participation and future equity index inclusion.
  

• Reduction in Minimum Allotment for Private InvITs: The minimum subscription amount for privately placed InvITs was standardized at INR 25 lakh, down from the previous INR 50 lakh for mixed-asset portfolios, improving accessibility to high-net-worth individuals and family offices.
  

Price Returns and Total Returns for the Whitelisted REITs and InvITs as on December 31, 2025 were as follows:

Source: Bloomberg, NSE

2026 Outlook for REITs and InvITs

According to Collier’s report, office market activity is expected to remain an important area of focus in 2026, with Global Capability Centres continuing to represent a significant share of leasing activity alongside demand from flexible workspace operators. Demand–supply dynamics and tenant mix will remain relevant factors in assessing office-related real estate trends.

In the context of InvITs, asset monetisation activity—particularly in the roads sector—continues to be monitored, given the role of existing trusts, highway monetisation initiatives, and potential additions to trust portfolios. Roads currently represent a substantial proportion of infrastructure assets held under trust structures, underscoring their relevance within the broader InvIT landscape. From a macro perspective, interest rate conditions appear more stable compared to prior periods, which may influence financing and cash flow dynamics for yield-oriented assets.

Recent regulatory changes, including the classification of REITs as equity-related instruments for mutual funds effective 1 January 2026, alter the regulatory framework governing institutional participation. These changes may have implications for how market participants assess allocation frameworks and index eligibility over time.

Looking ahead, potential public listings of InvITs and REITs, along with ongoing regulatory refinements, could contribute to the continued evolution of these asset classes. SEBI’s focus on governance, disclosure standards, liquidity frameworks, and investor protection remains a key consideration as the market develops further.