By Arosh John | Founder & Chief Editor, Thane Real Estate News, Founder of John Real Estate
What is a REIT?
A Real Estate Investment Trust (REIT) is a SEBI-regulated trust that owns and operates income-producing real estate and lists its units on NSE/BSE. You can buy REIT units just like shares. By regulation, REITs must invest at least 80% in completed rent-yielding assets and distribute at least 90% of Net Distributable Cash Flow (NDCF) to investors, at least once every six months.
This straightforward and transparent structure makes it easy for retail investors to participate in India’s commercial real estate growth.
Why invest in REITs?
- Regular cash flow – Payouts are usually quarterly or half-yearly.
- Liquidity – Units are listed on exchanges and tradable like stocks.
- Low entry cost – Minimum investment from ₹10,000–₹15,000 in IPOs, or even 1 unit in the market.
- Diversification – Access to Grade-A offices, malls, and mixed-use assets.
- Attractive yields – Current cash yields average around 6–7.5%.
Listed REITs in India (as of September 2025)
- Embassy Office Parks REIT (Office)
- Mindspace Business Parks REIT (Office)
- Brookfield India REIT (Office)
- Nexus Select Trust (Retail + Mixed-use)
- Knowledge Realty Trust (Office; listed Aug 2025)
How can you invest?
- IPO Route – Apply during the REIT’s public issue through your broker app.
- Stock Exchange – Buy/sell on NSE or BSE using your demat account, just like equities.
Before investing in REITs, always check occupancy rates, tenant mix, distribution history, leverage, and pipeline. This due diligence helps you make informed investment decisions.
Returns & Taxation
- Distributions: Comprise dividends, interest, and capital repayment (tax treatment varies).
- Capital Gains: Units sold after 12 months attract long-term capital gains tax of 12.5% (on gains above ₹1.25 lakh annually).
Consult your CA or tax advisor for the precise impact.
Risks to note
- Vacancies or slower leasing can reduce payouts.
- Rising interest rates can affect valuations and borrowing costs.
- Regulatory or tax changes may alter distribution structures.
- City or tenant concentration can increase volatility.
Call to Action
Looking to explore real estate investments beyond REITs—premium apartments, luxury villas, or curated second homes?
Connect with John Real Estate for personalised advisory and access to exclusive opportunities.
About the Author
Arosh John is the Founder & Chief Editor of Thane Real Estate News (TREN) and Founder of John Real Estate. With over a decade of expertise in the Thane market, he specialises in resale transactions, premium homes, and micro-market insights. Arosh’s mission is to simplify real estate decisions through data-driven analysis and transparent guidance.
Disclaimer
This article is intended for general information and education only. It does not constitute investment, tax, or legal advice. REITs and related securities are market-linked instruments and subject to risks. Past performance is not indicative of future results. Readers should verify details from official SEBI regulations, exchange filings, and the latest tax circulars, and consult a qualified professional before making any financial decision. Mentions of specific REITs or companies are illustrative only and should not be considered endorsements or recommendations.
