REIT investing allows individuals to earn from income-generating real estate without the burden of property ownership, maintenance, or hefty capital requirements. A diversified portfolio of real estate assets and the possibility of consistent dividend income are two benefits of investing in REITs in India. Given REITs’ increasing appeal in India, it’s critical for investors to comprehend their options and know how to make wise investments in this asset class.
REIT Investing 101: Get Property Returns Without the Hassle
REITs in India have gained significant traction since their introduction in 2019, with four publicly listed REITs now managing assets worth ₹1,52,000 crores plus and delivering returns of up to 20% plus in the past year—significantly outperforming traditional realty stocks. Real Estate Investment Trusts, or REITs for short, are businesses that own, manage, or provide funding for commercial real estate, such as shopping centres and office buildings. This guide explains everything newcomers need to know about REIT stocks, the Nifty REIT index, and why this asset class has grown in popularity among retail investors looking for real estate exposure with stock-market liquidity, whether they are examining how to invest in REITs or comprehending the list of REITs in India.
What Is a REIT, and Why Should You Care?
A REIT, or Real Estate Investment Trust, is a company that owns and manages income-generating real estate properties such as office buildings, shopping malls, warehouses, and hotels. REITs work similarly to mutual funds—whereas mutual funds invest in stocks and bonds, REITs pool money from multiple investors to invest in commercial real estate properties that generate consistent rental income. This investment structure democratises real estate investing by allowing retail investors to invest in premium commercial properties that were previously only available to institutional investors and high-net-worth individuals.
- REITs in India are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Real Estate Investment Trusts) Regulations, 2014.
- REIT units are listed and traded on stock exchanges such as the NSE, giving them liquidity similar to stocks—a stark contrast to physical real estate, which can take months or years to sell.
- REITs are required by law to distribute at least 90% of their net distributable cash flows to unit holders, ensuring that investors receive regular income in the form of dividends, interest payments, or rental distributions.
What are the top-listed REITs in India?
Some of the top REITs in India include Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust. These REITs have a strong portfolio of commercial properties and a track record of consistent returns for investors.
Which are the best REIT stocks in India?
In India, there isn’t a single “best” REIT because the best option relies on risk tolerance and investment goals. Nonetheless, there are currently four publicly traded REITs in India, each with unique performance traits and strengths.
What are the four REITs in India?
The four main REITs in India are Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India Real Estate Trust, and Blackstone-Embassy Office Parks REIT. Each of these REITs offers investors exposure to different segments of the commercial real estate market in India.
Mindspace Business Parks REIT
With a CAGR of 8.85%, a total return of 15.27%, and the lowest volatility (a standard deviation of 13.39%), it has the best risk-adjusted performance of all office REITs. It is more stable because it is spread out geographically across Mumbai (38%), Pune (16%), Hyderabad (43%), and Chennai (3%), and its tenants are a mix of BFSI, consulting, and domestic corporates.
Nexus Select Trust
With a CAGR of 19.67% and a total return of 24.86%, it gives the best overall returns. As India’s first retail REIT, it runs 19 shopping malls in 15 cities, which were 97.2% full in FY25 and brought in ₹124 billion in rent. Its shorter listing history (May 2023) means that performance needs more time to settle down.
Embassy Office Parks REIT
The company, which was India’s first listed REIT, is in charge of a huge 51.1 million square foot portfolio in Bengaluru, Mumbai, Pune, NCR, and Chennai. With a compound annual growth rate of 4.82% and a total return of 11.29%, it has the average returns but the highest standard deviation.
Brookfield India Real Estate Trust
India’s only 100% institutionally managed office REIT, it has 10 Grade-A assets across Mumbai, Gurugram, Noida, Kolkata, and Delhi. It records the lowest CAGR at 3.04% with a 9.19% total return and moderate volatility of 15.58%.
Which is the largest REIT in India?
As of September 2025, Embassy REIT has a market value of approximately ₹40,464 crore. The REIT has the highest weighted average lease expiry (WALE) of 8.4 years in FY2025 among Indian REITs, demonstrating operational strength by keeping tenants.
In August 2025, Knowledge Realty Trust (KRT) REIT raised ₹6,200 crore in India’s largest REIT IPO, becoming a new competitor. KRT has a gross asset value of ₹62,000 crore and a net operating income of ₹3,432 crore in FY25. It is the largest office REIT. This REIT claims to be India’s most geographically diverse office REIT and is backed by Blackstone.
Which REIT has the best returns?
The one-year performance rankings (as of September 2025) show significant variation among the four listed REITs:
- Mindspace Business Parks REIT – 29% returns
- Brookfield India Real Estate Trust -17% returns
- Nexus Select Trust – 12% returns
- Embassy Office Parks REIT – 4.2% returns
These returns significantly outpaced realty stocks, with the Nifty Realty index declining 20% during the same period.
For income-focused investors, dividend yields vary across REITs:
- Nexus Select Trust – 6.15% dividend yield
- Brookfield REIT – 6.30% dividend yield
- Embassy REIT – 5.8% dividend yield
- Mindspace REIT – 5.07% dividend yield
Indian REITs collectively deliver average distribution yields of 6–7%, substantially higher than mature markets like the US and Singapore.
How to Invest in REITs in India?
Learning how to invest in REIT is straightforward, as the process resembles buying stocks on exchanges.
Step 1: Open a Demat and Trading Account
Open a demat and trading account with a broker like Kite by Zerodha that is registered with SEBI if you want to invest in REITs. New investors have to go through the Know Your Customer (KYC) process, which checks their name, address, and financial information. They also have to link their bank account so that money transfers go smoothly.
Step 2: Research REIT Performance and Portfolio
Evaluate the property portfolios, occupancy rates, distribution yields, tenant quality, and past performance of the four listed REIT options. Over the past 12 months, Indian office REITs have produced total returns of over 15%, greatly surpassing the BSE Realty Index.
Step 3: Place Buy Orders on the Exchange
Put in a buy order after logging into your trading account and searching for the desired REIT stock using its ticker symbol (for example, EMBASSY for Embassy Office Parks REIT). Like common stocks, REIT units trade on the NSE.
Step 4: Monitor Distributions and Portfolio
Keep tabs on your REIT investments’ quarterly distribution announcements and property portfolio updates. The four listed Indian REITs gave shareholders ₹1,559 crores in Q1 FY25-26.
What Is the Nifty REIT Index?
The Nifty REIT index, known as the Nifty REITs & InvITs Index, tracks publicly listed REITs and InvITs on the National Stock Exchange. This index started on July 1, 2019, with a base date of April 11, 2023, and a base value of 1000. It benchmarks the Indian REIT and InvIT sector.
There are 9 components in the Nifty REIT index, and free-float market capitalisation determines its weight. Individual securities are limited to 33% weight, and the top three securities together can make up no more than 72%, promoting diversification. The index is updated every three months to match market changes.
The Nifty REIT index offers various advantages for investors. It provides a way to compare the performance of REIT fund portfolios and individual REIT stock returns. The index helps investors monitor the health and growth of India’s emerging REIT market. In the past year, the index has performed well, with returns for its components between 4% and 29%.
Is REIT a good investment?
REITs in India allow investment in commercial real estate without owning property. They help diversify portfolios beyond stocks and bonds. With a rule to distribute 90% of income, REITs provide steady dividend yields. REIT units trade on stock exchanges, allowing investors to buy and sell quickly during market hours.
REIT vs. Other Investment Options
| Investment Option | Minimum Amount | Liquidity | Annual Returns | Income Regularity | Risk Level | Effort Required |
|---|---|---|---|---|---|---|
| REITs | ₹50,000 | High | 8-12% | Quarterly distributions | Medium | Low |
| Direct Equity | ₹500 | High | 10-15% | Irregular dividends | High | Medium |
| Equity Mutual Funds | ₹500 | High | 10-14% | Rare distributions | Medium-High | Low |
| Bank Fixed Deposits | ₹1,000 | Low | 6-7% | Regular interest | Low | Very Low |
| Real Estate | ₹30 lakhs+ | Very Low | 6-10% | Monthly rental | Medium | High |
| Gold | ₹1,000 | Medium | 8-10% | No income | Medium | Low |
| Corporate Bonds | ₹10,000 | Low | 7-9% | Regular interest | Low-Medium | Low |
What is a disadvantage of REITs?
REITs come with several significant disadvantages that investors should carefully consider before investing.
- REIT prices, like other publicly traded securities, fluctuate and may not perform as expected.
- REITs are extremely sensitive to interest rate fluctuations, and rising interest rates negatively impact REIT stock prices.
- REITs must distribute 90% of their taxable income to shareholders, leaving a small reinvestment and growth margin.
- REIT dividends are not “qualified dividends” and are taxed as ordinary income at the investor’s marginal tax rate, likely higher than capital gains tax rates.
Is REIT a better investment than FD in India?
REITs can be better than fixed deposits for certain investors, but the choice depends on risk tolerance, tax bracket, and investment goals. For higher-tax investors, REITs offer better post-tax returns than FDs. Some small finance banks offer 8.2% for 5-year fixed deposits (October 2025). The effective return for investors in the 30% tax bracket is 4.9% because this interest is fully taxable at slab rates.
REITs offer distribution yields of 5-7% annually, plus capital appreciation of 5-7%, bringing total returns to around 12%. The Nifty REIT InvIT Index has delivered approximately 12% returns since its inception in 2019. Listed REITs recently posted returns ranging from 4.2% to 29% over a one-year period (as of September 2025).
REITs are market-risky and return-uncertain. Their valuations depend on interest rates, office/retail demand-supply dynamics, and property market conditions. They’re safer than small-cap stocks but less stable than FDs.
REITs enjoy significant tax advantages:
- Dividend income from REITs is taxable at slab rates, similar to FD interest, but investors also benefit from capital appreciation potential.
- Long-term capital gains (holdings over 12 months) are taxed at 12.5% above ₹1.25 lakh annually.
- Short-term capital gains (under 12 months) are taxed at 20%.
- The pass-through taxation model prevents double taxation.
Except for Section 80C deductions in tax-saving FDs, FD interest is fully taxable at slab rates.
The best way to invest in REITs is to follow the following checklist and conduct thorough research on the company’s financial health and potential for growth. Moreover, the following PDF file contains a comparison between the top-listed REITs in India for you to know the difference in returns, risks, and other important factors. Moreover, it has a glossary of key terms related to REIT investing that can help you better understand the market and make informed decisions. It is recommended that you analyse this information carefully before making any investment decisions.
Free PDF – REIT Investor’s Starter-Kit
How Are REITs Taxed in India?
Understanding REIT taxation is crucial for calculating net returns. India’s tax framework for REITs aims to avoid double taxation through pass-through treatment.
- Dividend Income: If the Special Purpose Vehicle (SPV) under the REIT opts for the concessional tax rate under Section 115BAA, dividend income is taxable at the investor’s applicable slab rates. A 10% TDS applies if dividend income exceeds ₹5,000 annually (increasing to ₹10,000 from FY 2025-26).
- Interest Income: Interest distributions from REITs are taxable at the investor’s slab rates, with 10% TDS deducted if interest exceeds ₹5,000 per annum.
- Rental Income: Rental income distributed by REITs is taxed at applicable slab rates, with 10% TDS applied.
- Short-Term Capital Gains (STCG): Gains from selling REIT units held for less than one year are taxed at 20%.
- Long-Term Capital Gains (LTCG): Gains from selling REIT units held for more than one year are taxed at 12.5% if they exceed ₹1.25 lakh annually, without indexation benefits.
- The pass-through taxation structure ensures income is taxed only at the investor level, not at the REIT level, avoiding the double taxation common with traditional corporate structures.
Final Word
REIT investment offers a way to gain real estate exposure without the challenges of owning property. Four REITs in India have shown strong returns, reaching up to 29% in the past year, and have distributed ₹4,259 crores to investors in nine months of FY25, highlighting their performance potential. REIT stands for Real Estate Investment Trust. It refers to managed portfolios of commercial properties that provide regular income by distributing 90% of earnings. Investing in REIT is easy with a regular demat account and a minimum investment of ₹50,000. The Nifty REIT index tracks a number of REITs in India, including Embassy Office Parks, Mindspace Business Parks, Brookfield India Real Estate Trust, and Nexus Select Trust. REIT stocks provide diversification, liquidity, and steady cash flows. However, investors should think about tax implications and interest rate sensitivity before investing in REITs in India.
FAQs
What is a REIT and how does it work in India?
A REIT is a company that owns and runs properties that make money, like malls and offices. In India, REIT units can be bought on stock exchanges just like stocks. REITs get rent from tenants and give most of the money they make to investors as dividends.
Can I invest in REITs with a small amount of money, or do I need a big budget?
You can start investing in REITs in India with as little as the minimum unit price of the listed REIT. This makes REITs accessible to regular investors who want to earn from commercial real estate without buying property outright.
How do I invest in a REIT?
To invest in a REIT, you need a demat account and a trading account with a broker. Find the REIT symbol (like EMBASSY or MINDSPACE), place a buy order, and the units will go to your account. You will get income from your investment, usually every three months.
What are the risks of investing in REITs compared to owning property?
REITs are liquid and offer a range of investments, but their prices can change with the stock market and interest rates. You don’t have control over which buildings the REIT owns like you do when you own real estate. But you also don’t have to deal with problems like repairs and managing tenants.
How are REIT returns taxed for investors in India?
You are taxed based on your income tax bracket when you get money from REITs like dividends, interest, and rent. A small tax is also taken out at the source (TDS). If you keep REIT units for more than a year, you will be taxed on your long-term capital gains when you sell them.
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