REITs in India and its future

REITs (Real Estate Investment Trusts) are companies that own and operate income-generating commercial real estate properties and are an excellent yet affordable option to invest in Real Estate. They have gained significant popularity among institutional & retail investors.

The first REIT (Embassy Office Parks REIT) was launched in 2019 and two more companies listed their REITs (Mindspace REIT, Brookfield REIT) within the next two years. Currently, they are capturing the market worth ?70,705 Cr.

REITs come with liquidity, without actually purchasing or managing real estate properties. REITs prove to be a source of income through timely dividends ranging between 5-7% in form of rental income from commercial properties, such as offices, schools and retail malls. These investments can have capital appreciation in addition to the rental yields.

Similarly, Infrastructure Investment Trusts (InvITs) are like REITs, but they invest in under-construction infrastructure projects like roads, highways, power plants and telecom towers.

REITs and InvITs have raised over $4 billion, with an estimated aggregate market capitalization of three listed REITs being over $7 billion and InvITs exceeding $10 billion by 2025.

We anticipate that more REITs will enter the market shortly, resulting in healthy growth for institutional and retail investors.