Investor preferences for InvITs (Infrastructure Investment Trusts) and REITs (Real Estate Investment Trusts) are on the rise, with fundraising through these routes reaching Rs 17,116 crore in 2023-24. It is a 14-fold year-on-year surge fuelled by the prospect of stable returns. A REIT is made up of a portfolio of commercial real estate assets with the majority of them already leased out. On the other hand, InvITs comprise a portfolio of infrastructure assets like highways. According to industry experts, the scope for infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) in terms of fundraising for the current fiscal year 25 is very optimistic. As per the data from Prime Database.com, REITs and InvITs were at a record low of Rs 1,166 crore in 2022-2023.
Apart from this, InvIT saw its first offer for sale in 2023-24, under which Data Infrastructure Trust raised Rs 2,071 crore. Offer for Sale (OFS) is a mechanism that enables the existing shareholders of a listed company, typically promoters, to sell or dilute their holdings through an exchange-based bidding platform.
WiseX CEO Aryaman Vir interacted regarding this issue in an interaction with the Press Trust of India. He said, “After Sebi’s amendments to the SM (small and medium) REITs regulations last month, we are poised for a transformative shift. The Indian fractional ownership market, set to evolve into SM REITs, is projected to grow from USD 500 million to over USD 5 billion in AUM by 2030, indicating a significant expansion and bright prospects for SM REITs.”
WiseX is a neo-real estate investments platform that facilitates fractional ownership. Fractional ownership is owning a percentage of an asset that can grant the individual the benefits of usage rights and income sharing.
Currently, there are 24 registered InvITs and 5 REITs with an assets base of over Rs 5.5 lakh crore. Asset base refers to the underlying assets providing value to a company, investment, or loan. The first investment trust was registered with the Securities and Exchange Board of India in 2016-17.
InvITs and REITs surged 10-fold year-on-year to Rs 11,474 crore in 2023.
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