REIT

Full form: Real Estate Investment Trust

Investments

A REIT is a trust that owns income-producing real estate assets (office buildings, malls, warehouses) and distributes 90% of income to unit holders. Allows retail investors to invest in commercial real estate from Rs 10,000-15,000, with liquidity of stock exchange trading.

In detail

Indian REITs (listed):nEmbassy REIT: largest, office parks in Bangalore/Mumbai/Hyderabad/PunenMindspace REIT: office portfolio across major citiesnBrookfield India REIT: office propertiesnNexus Select Trust: retail mallsnnReturns: dividend yield 5-7% + capital appreciation 4-6% = total 9-12% historically.nTaxation: 10% on dividends, LTCG 12.5% after 12 months on capital gains.nMinimum investment: Rs 10,000-15,000 (one lot of 100 units).

Formula

REIT yield = Annual dividends per unit / Current unit price x 100

Real-life example

🇮🇳 India example

Kavya invests Rs 1L in Embassy REIT at Rs 350/unit (285 units). Annual dividend: approximately Rs 6,000 (6% yield). Unit price rises to Rs 380. Capital gain: Rs 8,550. Total return: Rs 14,550 = 14.6% on Rs 1L. Diversified commercial real estate exposure from Rs 1L.

Frequently asked questions

REIT vs direct real estate investment -- which is better? ▼

REIT wins on: liquidity (sell instantly vs months for property), smaller ticket size (Rs 10K vs Rs 50L+), no management burden, diversified portfolio, and regulated disclosure. Direct real estate wins on: leverage (home loan) and emotional ownership.