India’s listed Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) strengthened their position as reliable, yield-oriented investment options in calendar year 2025, decisively outperforming both equities and government bonds.
According to data compiled by ICRA Analytics from InfRE360, listed REITs and InvITs delivered a combined return of 19.55 per cent on an equal-weight basis in 2025. This was significantly higher than the Nifty50 Total Returns Index (TRI), which rose 11.42 per cent, and the G-Sec Index, which gained a modest 6.81 per cent during the same period.
The performance highlights a clear shift in investor preference towards instruments offering stable income, predictable cash flows, and relatively lower volatility, especially in a year marked by fluctuating interest rates and uneven equity market sentiment.
REITs lead the charge
Among the listed trust segments, REITs emerged as the standout performers. The sector delivered an impressive 29.68 per cent return in 2025, nearly double its 16.81 per cent return in 2024. Strong office leasing demand, stable rental yields, and improved occupancy levels across marquee commercial assets supported this sharp rise.
Large, grade-A office portfolios in major cities continued to benefit from steady demand from technology firms, global capability centres, and domestic corporates. Regular distributions and predictable income streams made REITs particularly attractive to investors seeking alternatives to fixed-income products.
ICRA Analytics noted that REIT performance reflected sustained leasing momentum and consistent yield profiles, reinforcing investor confidence in the asset class even amid broader market uncertainty.
Power InvITs show resilience
Power InvITs also delivered robust returns, posting a gain of 20.22 per cent in 2025, up sharply from 9.43 per cent in the previous year. The improvement was driven by operational stability, long-term power purchase agreements, and relatively predictable revenue streams.
With India continuing to invest heavily in power transmission and renewable energy infrastructure, power InvITs benefited from both sectoral tailwinds and improving investor awareness. The segment’s performance underscored the role of infrastructure-backed trusts as long-term yield plays rather than short-term trading instruments.
Road InvITs lag peers
In contrast, road InvITs underperformed other trust categories, delivering a return of 6.55 per cent in 2025, down from 9.49 per cent in 2024. The muted performance reflected asset-specific challenges, traffic-related risks, and the impact of new listings entering the market.
According to ICRA Analytics, the divergence in returns across InvIT segments highlights that not all infrastructure assets behave uniformly. While power and real estate assets benefited from stable demand and cash flows, road assets faced mixed operating conditions, affecting overall returns.
Trusts widen the performance gap
Year-on-year comparisons underline the growing strength of listed trusts as an asset class. While the Nifty50 TRI edged up marginally from 10.04 per cent in 2024 to 11.42 per cent in 2025, and G-Sec returns declined sharply from 10.06 per cent to 6.81 per cent, public trusts surged from 13.14 per cent to 19.55 per cent.
“Though trusts delivered stronger returns in 2025, the year-on-year data reflects mixed movement across segments, with road InvITs recording a decline even as REITs and power InvITs advanced,” said Madhubani Sengupta, Head – Knowledge Services, ICRA Analytics.
She added that REITs nearly doubled their returns in 2025, while power InvITs more than doubled theirs, pointing to improving fundamentals and investor confidence in these segments.
Interest rates tilt investor preference
The interest rate environment played a key role in shaping investment behaviour during the year. With yields on government securities under pressure, investors increasingly looked beyond traditional debt instruments for income-generating options.
“Equity-linked and yield-oriented instruments gained preference in 2025, which weighed on G-Sec performance,” Sengupta said. “In contrast, trusts continued to attract strong interest, supported by steady cash flows, competitive yields, and growing demand for infrastructure and real estate-backed investment options.”
REITs and InvITs also benefited from their transparent structure, mandatory distribution norms, and improving liquidity, making them more accessible to retail as well as institutional investors.
Returns may rise further
ICRA Analytics pointed out that December 2025 quarter distributions are yet to be fully accounted for in the return calculations. Once these are credited, overall returns for the year could see a further uptick.
The performance figures are based on equal-weight calculations across all listed REITs and InvITs, rather than market capitalisation weighting. Returns include both price appreciation and distributions received during the year, offering a more holistic picture of investor gains.
Growing role in portfolios
The strong showing in 2025 reinforces the growing role of REITs and InvITs in diversified investment portfolios. As India continues to expand its commercial real estate and infrastructure base, these trusts are likely to remain central to the country’s capital market story.
For investors seeking regular income with the potential for capital appreciation, listed trusts are increasingly being seen not as niche instruments, but as mainstream portfolio allocations alongside equities and bonds.
As 2026 unfolds, market participants will watch whether this momentum sustains, especially amid evolving interest rate trends and fresh infrastructure additions. For now, 2025 stands out as a year when REITs and InvITs firmly outperformed the old favourites.
