SEBI's REIT Move Sparks Expectations Of Higher Liquidity, Investor Participation

With SEBI shifting REITs into the equity category, experts are expecting more inflows of global capital from Foreign Portfolio Investors. Mutual fund houses are also FPIs may increase their allocation to Asia.

The regulator's move to reclassify Real Estate Investment Trusts as equity is a pivotal moment, according to industry experts. This change, which removes the previous 10% investment restriction for mutual funds, is a milestone that will help make the asset class mainstream and matches global standards, according to Ramesh Nair, chief executive officer and manging director of Mindspace Business Parks REIT.

For Nair, this move is a big milestone moment, as it positions the asset class for inclusion in various investment indexes and will draw a lot more interest from fund houses, insurance companies, and FPIs.

"There will also be a lot more interest from fund houses, insurance companies and FPIs. More investors means more liquidity and better price discovery. We also expect more Asia allocations based on this move," he said.

Further, Abhishek Goel, the managing director and head of Infrastructure and Real Assets, noted that the change increases vibrancy and depth in the market, adding that he expects REITs to stand out in performance, especially in a volatile market.

These investment vehicles have been successful in India, with REITs and Infrastructure Investment Trusts nearly Rs 1.5 trillion in the last five years alone. As of the end of the 2025 financial year, REITs and InvITs together manage assets worth an estimated Rs 8.7 lakh crore.

The current landscape includes five registered REITs and 23 registered InvITs. The REITs include prominent names such as Embassy Office Parks, Mindspace Business Parks, Brookfield India Real Estate Trust, and Nexus Select Trust.

On the InvIT front, the market features trusts like PowerGrid Infrastructure Investment Trust, IndiGrid Infrastructure Investment Trust, National Highways Infra Trust, IRB InvIT, Cube Highway Trust, and Bharat Highways Invit. The continued focus on creating a robust and transparent ecosystem for these investment vehicles underscores the long-term confidence in India's infrastructure sector.