REITs and INVITs are not exactly a substitute for equity but they represent a distinct asset class. They allow investors to participate in realty projects and infrastructure projects as financial investments instead of taking on the hassles of buying realty physically. Also, these products allow the investor to reduce portfolio risk by diversifying.

Firstly, for the investors it offers a more scientific and reliable way to invest in real estate. They can participate in the growth of real estate assets without the hassles of buying actual real estate. For investors it is almost like holding real estate in demat form.

Secondly, this product also becomes suitable to HNIs and retired persons who are looking at regular income. Typically, REITs are required to distribute most of their earnings to the investors and it can become a good source of safe and regular income like debt funds.

Thirdly, for retail investor portfolios, it offers a diversification of risk from regular asset classes like equity, debt and gold. Even within the real estate sector, it is possible for investors to lay their hands o a very high quality and diversified portfolio of real estate assets. This is something an individual cannot create by themselves.

Last, not the least, for long term institutional investors like Insurance Companies and Pension Funds, this offers a good low-risk option. Infrastructure assets being long gestation assets, it also helps long term liabilities being better matched.

In a nutshell, it is not just about developers and investors. It is also a big benefit from the macroeconomic point of view. It helps channel funds for the critical infrastructure projects without putting a strain on government finances. After all, infrastructure has a multiplier impact on GDP and industrial growth.