Many young professionals and even seasoned investors today are turning towards REITs (Real Estate Investment Trusts) and INVITs (Infrastructure Investment Trusts). Let’s understand what they are and why they matter.
What Are REITs?
REITs or Real Estate Investment Trusts, are companies that own, operate or finance income-producing real estate. Think of them as mutual funds, but instead of investing in stocks or bonds, they invest in properties like office buildings, shopping malls, hotels or even warehouses.
By law, REITs in India (regulated by SEBI) must distribute at least 90% of their income to investors as dividends. This structure makes them quite attractive for investors seeking steady income and diversification without actually becoming landlords.
What Are INVITs?
On the other hand, Infrastructure Investment Trusts (INVITs) work in a similar way, but instead of real estate, they focus on infrastructure assets like toll roads, power transmission lines or pipelines.
So, while REITs give you exposure to commercial property markets, INVITs open the door to the infrastructure sector. Together, they make up a new and growing segment of investment trusts that are helping India bridge the gap between infrastructure needs and private investments.
Why Should Investors Care About REITs & INVITs?
- Diversification – Instead of putting all your money in equities or FDs, you can invest in REITs and INVITs to spread your risk.
- Steady Income – Since both are designed to distribute profits regularly, they’re great for investors seeking passive income.
- Low Entry Barrier – You don’t need large capital to begin. You can start with small amounts through stock exchanges.
- Transparency & Regulation – SEBI regulations make them more transparent and reliable compared to some traditional real estate investments.
- Professional Management – Unlike owning physical property, you don’t need to deal with tenants, maintenance or repairs. Everything is handled by professionals.
Understanding How They Work
Suppose a REIT owns three large IT parks. These properties are leased to top tech companies. The rent collected is pooled together and after deducting management costs and other expenses, 90% of the remaining income is distributed to REIT investors as dividends.
Similarly, for INVITs. Imagine a company owns several toll roads. Every time vehicles pass and pay toll, revenue is generated. That revenue is then shared with INVIT investors.
This makes both REITs and INVITs income-yielding investment instruments, similar to bonds in some ways, but also offering growth potential like equities.
Performance & Market Trends in India
REITs and INVITs are still relatively new in India .The first one was listed only in 2019. However, they’ve grown steadily since then.
With India’s push towards infrastructure development and growing corporate leasing activity, this segment is expected to expand significantly over the next decade.
According to reports from CBRE and Knight Frank, India could see more than ₹1.5 lakh crore worth of REIT-listed assets in the coming years. Also, the government’s focus on infrastructure monetization has made INVITs a key part of long-term investment strategies.
For investors, this means two things:
- Growing opportunities in the REIT and INVIT space.
- The need to actually understand how these instruments function ,not just from an investment point of view but also from a career perspective.
Why Banking and Finance Professionals Should Learn About REITs & INVITs
The BFSI sector is evolving fast and professionals today need to understand new financial products beyond the traditional ones.
REITs and INVITs are now part of structured finance, portfolio management and even corporate advisory services. Many large banks and financial institutions are directly involved in structuring, underwriting and managing such investment vehicles.
That’s why specialized courses for banking professionals increasingly include modules on alternative investments, REITs and INVITs. These programs help professionals understand
- How these trusts are structured legally and financially
- Their taxation and regulatory frameworks
- The valuation and performance metrics involved
- Risk factors and investor protection norms
Learning Pathways: Online Courses & Corporate Training
There are excellent online courses and corporate training providers that offer practical, industry-oriented modules on REITs, INVITs and investment analysis.
Some of these courses are part of larger finance certifications like:
- Financial Modelling & Valuation Analyst (FMVA)
- Certificate in Investment Banking
- Real Estate Financial Analysis courses
How to Get Started as an Investor
If you’re looking to invest personally, here’s a simple step-by-step guide:
- Research Listed REITs/INVITs: Start by checking which ones are currently listed on NSE or BSE.
- Study Their Portfolio: Look at the kind of assets they own, office spaces, roads, transmission lines, etc.
- Analyze Returns & Occupancy Rates: Don’t just look at past performance; check how consistent the cash flows are.
- Understand Taxation: Dividends from REITs/INVITs may be taxed differently depending on the source of income.
- Invest via Your Demat Account: You can buy and sell units just like shares.
These instruments, while safer than some equity investments, still carry risks like changes in interest rates, economic slowdowns or project-specific risks. So, it’s always good to understand them deeply before investing.
India’s Financial Landscape
REITs and INVITs are more than just investment products. They represent a structural change in how capital flows into real estate and infrastructure sectors.
As India’s economy grows, we’ll need massive investments in office spaces, highways, energy, and logistics. These trusts act as the bridge connecting everyday investors and institutional capital to those projects.
That’s why understanding REITs and INVITs isn’t just important for investors , it’s also vital for policymakers, bankers and corporate finance professionals shaping India’s future growth story.
