A Beginner’s Guide to Investing in REITs in India

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A Beginner’s Guide to Investing in REITs in India

The Indian real estate market has opened a new avenue for retail investors through Real Estate Investment Trusts (REITs). If you are looking for a way to diversify your portfolio and earn passive income without directly buying property, REITs can be an excellent option. This blog will guide you step-by-step on how to invest in REITs in India.

What Are REITs?

REITs (Real Estate Investment Trusts) are companies that own, operate, or finance income-generating real estate across sectors such as commercial, retail, and hospitality. By investing in REITs, you gain exposure to real estate assets without having to buy physical property.

SEBI (Securities and Exchange Board of India) introduced regulations for REITs in 2014, and the first public REIT in India—Embassy Office Parks REIT—was listed in 2019.

Why Invest in REITs?

Here are some key advantages:

Diversification: Adds real estate to your investment portfolio.
Low Entry Barrier: Start with a small amount (as low as ₹300–₹400 per unit).
Regular Income: REITs must distribute 90% of their net distributable income.
Liquidity: Publicly listed REITs can be bought or sold on stock exchanges.

Types of REITs in India

Equity REITs: Own and operate income-generating properties.
Mortgage REITs: Lend money to real estate owners or invest in mortgage-backed securities.
Hybrid REITs: Combine both equity and mortgage investments.

Currently, equity REITs are the most popular in India.

Steps to Invest in REITs in India

Open a Demat and Trading Account
Just like stocks, REITs are traded on NSE and BSE. You need a Demat account with a broker.
Research Available REITs
As of now, major listed REITs include:
- Embassy Office Parks REIT
- Mindspace Business Parks REIT
- Brookfield India REIT
- Nexus Select Trust REIT
Check Financials and Distribution Yields
Study their asset portfolio, lease terms, occupancy rates, and distribution history.
Place Your Order
Through your trading platform, search for the REIT ticker and place a buy order.
Monitor Your Investment
Keep track of performance, dividends, and news updates.

Taxation on REITs

Dividend Income: If the underlying SPV is not taxed, the dividend is taxable in the hands of the investor.
Capital Gains: Short-term gains (holding < 3 years) are taxed at 15%, and long-term gains (> 3 years) above ₹1 lakh are taxed at 10%.

Always consult a tax advisor for personalized guidance.

Final Thoughts

REITs provide a great opportunity to invest in the real estate sector without the challenges of property management. They suit investors seeking stable returns, diversification, and long-term appreciation. Start small, understand the risks, and grow your investment steadily.