India’s listed Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) emerged as some of the strongest-performing financial instruments in 2025, outperforming both benchmark equity indices and government bonds. The trend underscores a growing shift in investor behaviour towards income-generating assets backed by physical infrastructure and operational cash flows.
Market data compiled by a domestic ratings and analytics firm shows that listed trusts delivered close to 20 per cent annual returns on an equal-weight basis during the year. This comfortably exceeded returns from large-cap equities and sovereign debt, both of which faced headwinds from market volatility and changing interest rate expectations. REITs were the clear outperformers within the trust universe. Returns from listed office-focused trusts surged sharply, supported by stable occupancy levels, long-term leasing contracts and resilient demand for grade-A commercial space in major urban centres. Analysts point out that India’s office market has benefited from the continued expansion of technology firms, global capability centres and professional services, providing steady rental income even as global real estate markets remained uneven. The strong showing reflects a broader re-evaluation of commercial real estate as a core urban asset. With cities prioritising densification and transit-linked business districts, institutional office portfolios have increasingly been seen as long-duration income streams rather than cyclical property plays. Infrastructure-backed trusts also recorded solid gains, though performance varied by asset type. Power transmission and energy-focused InvITs delivered robust double-digit returns, aided by predictable revenues anchored in long-term contracts and regulated frameworks. As India accelerates investments in energy transition and grid infrastructure, such assets have drawn growing interest from long-term investors seeking stability over speculation.
By contrast, road-focused InvITs lagged behind, with returns remaining subdued. Sector specialists attribute this to traffic variability, asset-specific risks and the impact of new asset additions, which diluted near-term yields. The divergence highlights that infrastructure is not a monolithic asset class and that operational characteristics play a decisive role in investor outcomes. The broader macroeconomic environment also influenced asset allocation decisions in 2025. With government bond yields moderating and equity markets showing uneven momentum, yield-oriented instruments gained prominence. Listed trusts benefited from mandatory distribution norms, transparent structures and improving liquidity, making them increasingly accessible to both institutional and retail investors. Urban economists note that the rising prominence of REITs and InvITs has implications beyond financial markets. By channelling long-term capital into income-producing assets, trusts are helping fund offices, power networks and transport infrastructure that underpin urban productivity and economic resilience.
With some year-end distributions yet to be fully reflected in return calculations, analysts expect final 2025 figures to edge higher. As India’s cities continue to expand and modernise, listed trusts are likely to play a growing role in aligning capital markets with sustainable urban development.
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REITs InvITs Gain Ground with Income Focus
