Today, Real Estate Investment Trusts (REITs) are considered as a new financial asset class developed and implemented in the majority of nations throughout the world.  India, too, has embraced this effective investment option. REITs in India provide individual investors with an easy way to park their money. With REITs, one can own, operate, or finance real estate assets that generate income and rent, such as commercial office buildings, shopping malls, retail spaces and others. 

How Does It Work? 

Investment in REITs is quite simple to understand. It follows the same principle as mutual funds, wherein investors can start with a limited amount of capital and reap benefits from diversification and the professional experience of a fund management. When the concept of REITs was first developed, they used a straightforward investment strategy of accumulating money from a pool of investors and investing it in any property that the fund management believed would provide a decent return on investment. 

Over a period of time, this investment approach has changed and became highly specialized & more professionally managed. Now the fund manager follows a theme based strategy & invests in a specific real estate asset class to match the risk reward ratio.

Benefits of Investing in REITs

1. Cost-Efficient Investment: Buying shares in Real Estate Investment Trusts is more affordable than directly investing in properties in India. Investors can easily acquire a smaller number of units without committing substantial capital.
2. Transparency: REITs are traded on stock exchanges, offering investors easy access to all relevant information online, allowing them to make well-informed decisions.
3. Perfect for small investors: REITs are particularly beneficial for small investors, as they don’t need to involve directly with the builders. Additionally, REITs pose lower liquidity risks compared to direct real estate investments.
4. Minimum risk for fraud: These are regulated by the Securities and Exchange Board of India (SEBI), significantly reducing the chances of fraudulent activities when compared to other investment options.
5. Reliable source of income: They provide a reliable income through dividends, primarily generated from rental revenues.

Want to invest in good REITs in India? Fret not! We have prepared a comprehensive list of some of the top REITs in the country that you should consider for your investment portfolio. 

Well-Known REITs in India

1. Embassy Office Parks REIT

It is India’s first publicly listed REIT, becoming one of the biggest players in the commercial real estate sector.  It owns and runs a portfolio of Grade A office spaces in major cities like Bengaluru, Pune, Mumbai, and Noida. Embassy REIT focuses on premium commercial properties and delivers steady revenue streams through long-term lease arrangements with trusted tenants.  It is a joint venture between Embassy Group, a leading property developer, and Blackstone, a global investment firm. Embassy REIT is considered as an excellent alternative for investors looking to gain exposure in India’s diverse commercial real estate market.

Why invest? 

• Stable Income: Embassy REIT has a proven track record of generating steady rental income from top-tier tenants.
• Experienced Management: Backed by Embassy Group and Blackstone, investors can benefit from experienced and reputable management.
•  Attractive Dividend Yields: Embassy Office Parks REIT is known for offering attractive dividend yields, which are generally higher than traditional fixed-income investments. 

2. Mindspace Business Parks REIT

It is another popular REIT in India where you should definitely consider investing in. The company’s portfolio includes five integrated business parks and five premium independent office buildings, with a total leasable area of 32.3 million square feet. The amount of revenue has jumped from Rs. 1,201 crores in FY22 to Rs. 1,278 crores in FY23. Investors have chosen to invest in Mindspace Business Park owing to its robust growth and exposure to top-notch commercial spaces. The REIT is managed by K Raheja Corp, one of the leading real estate developers in India with extensive experience in commercial real estate. 

Why invest? 

• Strong Tenant Base: Boasting a diversified tenant mix, including top IT and ITES companies.
• Strategic Locations: Mindspace Business Parks REIT invests in properties that are situated in high-demand commercial areas, enhancing their value.
• Sustainability Initiatives: Committed to green building practices, appealing to environmentally conscious investors.

3. Brookfield India Real Estate Trust

Backed by Brookfield Asset Management, a global leader in real estate investment, this REIT is an ideal investment option for those seeking exposure to commercial and residential real estate sectors. Brookfield India Real Estate Trust focuses on high-end properties and has a portfolio spread across key markets like Mumbai, Gurugram, Noida, and Kolkata, covering around 14 million square feet.

Why invest? 

• Premium Assets: Invests in Grade-A commercial buildings in prominent locations.
• Long-Term Leases: Secures long-term leases with leading multinational corporations.
• Global Expertise: Benefits from Brookfield’s global investment experience and robust management practices.

4. Nexus Select Trust REIT

It is the fourth listed REIT after Embassy Office Parks, Mindspace Business Parks, and Brookfield India Real Estate Trust. Backed by Blackstone, Nexus Select Trust offers a differentiated exposure to investors due to its retail assets. This REIT leverages its extensive market expertise and strong management practices to deliver consistent income and potential capital appreciation to its investors.

Why invest?

• Focus on High-Growth Sectors: It focuses on high-growth sectors in India such as retail and commercial real estate, which are poised for significant expansion. 
• Strong Market Position: Nexus Select Trust REIT holds a strong market position in the Indian real estate sector, with a portfolio of well-established and popular properties.
• Large Portfolio: It has a diverse portfolio of 17 operating shopping malls in 14 major cities, totaling 9.8 million square feet. Some of its major properties include Select Citywalk in Delhi and Nexus Seawoods in Navi Mumbai.

5. HDFC Real Estate Investment Trust

It is a major player in the Indian REIT industry, drawing on the power and reputation of the HDFC Group. This REIT specializes in commercial real estate, particularly in major metropolitan cities. HDFC REIT’s portfolio contains high-quality office properties that serve a variety of businesses, guaranteeing stable rental revenue. The REIT’s mindful management, savvy asset selection, and strong financial support make it a solid investment choice.

Why Invest? 

• Reputable Backing: Leverages the strength and reputation of HDFC Group, ensuring trust and reliability.
• Strategic Asset Selection: Properties are located in key business districts, ensuring high demand and occupancy.

6. Godrej Properties REIT

Everyone knows that Godrej Properties is one of the leading names in the list of best real estate developers in India. The firm deals in both commercial and residential segments, with projects in Mumbai, Bengaluru, Pune, and Delhi-NCR. With a strong pipeline of planned projects and a track record of timely execution, the company’s stock remains a top choice for investors hoping to profit on India’s rising real estate demand.

Why Invest?

• Strong Brand Reputation: The Godrej brand name enhances trust and reliability, making it an attractive investment option.
• High Standards: They are committed to high standards and sustainability, attracting top-tier tenants.
• Prime Locations:  Properties are strategically located in major business districts, ensuring high demand.

Conclusion

Investing in these REITs in India will allow you to get involved in India’s thriving real estate sector while potentially earning financial gains and income.  As the market evolves, staying informed about the latest developments and trends in the REITs market will be crucial for making well-informed investment decisions.