Understanding REITs in India: Top Real Estate Investment Trusts 2025

Conceptualised in the United States in the 1960s, REITs were designed to democratise real estate investment, allowing individuals to invest in large-scale, income-generating properties without the need to directly purchase or manage them. This model quickly gained traction globally, and India took its first steps toward adopting REITs in 2014 with the introduction of regulatory frameworks by the Securities and Exchange Board of India (SEBI). The allure of consistent rental income, combined with the potential for capital appreciation, has made investing in a REIT an attractive option for both institutional and retail investors. In this blog, we will explain what is REIT, how they work, and the top REIT companies in India.

Top REIT Stocks in India for 2025

Here is a curated list of the best real estate investment trust companies in India:

Note: The data in the list is dynamic and subject to change and was derived from the Tickertape Stock Screener. This is general industry data of REIT companies associated with the real estate space.

Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.

High-volatility stock portfolios for investors with a high risk appetite

Try smallcase

DISCOVER

High-volatility stock portfolios for investors with a high risk appetite

Try smallcase

Overview of the Top REIT Stocks

Here is a brief overview of the top REIT stocks in India:

Nexus Select Trust

Nexus Select Trust specialises in retail real estate, managing a portfolio of high-quality malls across India. Known for its diversified tenant mix and strategic locations, it has become a key player in the retail REIT space. Financially, it showcases a robust net profit margin of 29.86%, reflecting efficient operations, and a solid cash flow margin of 60.74%, ensuring strong liquidity and operational resilience.

Mindspace Business Parks

Mindspace Business Parks REIT focuses on Grade A office spaces across key metropolitan cities, catering to a mix of multinational and domestic tenants. Its disciplined financial management is evident from a five-year debt-to-equity ratio of 26.18%, significantly lower than the industry average of 63.87%. Additionally, a net profit margin of 21.2% and a cash flow margin of 61.63% highlight its strong financial position.

Embassy Office Parks

Embassy Office Parks REIT is India’s first publicly listed REIT, known for its premium office spaces and large-scale integrated business parks. It offers a promising return of 13.41% from current levels, surpassing its three-year CAGR of 1.69%. The REIT also maintains a balanced leverage profile with a five-year debt-to-equity ratio of 49.15%, well below the industry average of 63.87%.

Brookfield India Real Estate Trust

Brookfield India REIT manages a portfolio of commercial office spaces, strategically located in major business districts. The trust demonstrates exceptional financial performance with a cash flow margin of 77.26%, underscoring operational efficiency. Moreover, it is poised for a remarkable turnaround, with an expected earnings growth of 610.51% next year, a significant improvement from its three-year CAGR earnings decline of -9.98%.

What is a REIT?

A REIT stands for real estate investment trust. It is a type of real estate trust investment that owns and operates income-generating properties. The REIT investment India option allows you to diversify your portfolio beyond bonds and stocks. Additionally, REIT shares are attractive due to their two characteristics: 

• Strong dividend 
• Long-term capital appreciation 

This investment option allows both big and small investors to invest their money in REITs and earn profits accordingly. Small investors might combine their funds with those of other investors to invest more in significant commercial real estate projects. 

Properties included in a real estate trust investment are: 

• Data centers
• Infrastructure
• Healthcare facilities 
• Housing complexes and other properties 

Now that we understand what is the meaning of a REIT, let’s see why they make a potentially great investment opportunity, as well.

Types of REITs in India

Now that you understand what is REIT, here are the following are the types of REITs in India that you can invest in. 

Equity

Equity REITs are one of the most popular types of REITs. Mostly, it focuses on running and overseeing commercial buildings that produce income. Moreover, rent is a typical source of income in this area.

Mortgage

Mortgage REITs, commonly known as “mREITs,” are associated with lending money to proprietors and extending mortgage facilities. These REITs make money by charging interest on the money they lend to business owners.

Hybrid

Hybrid REITs allow investors to diversify their portfolios by investing in both equity and mortgage REITs. Here, both rent and interest are the primary sources of income for investors. 

Private REITs

Private REITs are real estate funds or companies that are not traded on the National Securities Exchange and are also not registered with the SEBI. Only institutional investors can purchase or invest in these REITs. 

Publicly traded REITs

Real estate investment trust shares are traded on the National Securities Exchange and registered with the SEBI (Securities & Exchange Board of India). These shares can be purchased by individual investors through the NSE. 

Public non-traded REITs

Non-traded REITs that are publicly traded are not traded on the National Stock Exchange but are registered with SEBI. These REITs are more stable because they don’t get affected by market fluctuations.

How to Invest in REIT in India?

Now that you know the types of REITS in India, let us now explore how to invest in real estate investment trusts in India and how to buy a REIT unit. Real estate investment trusts are frequently traded and listed on stock exchanges. These listed REITs stock in India make attractive investments. Hence, you need a DEMAT account to invest in a real estate trust investment. 

In India, you can invest in REITs India, in three ways: 

1) Equity: Equity REIT stocks India provide investors with a way to invest in the real estate market without purchasing individual properties. Additionally, REIT stocks are often considered more liquid and diversified than direct real estate investments.

2) Mutual Funds: REIT mutual funds in India are a type of mutual fund that invests in real estate investment trusts (REITs) and other real estate securities. These REITs stocks and funds are managed by professional portfolio managers who use their expertise to select and manage a diversified portfolio of REITs shares in India and other real estate-related securities.

3) ETFs or Exchange Traded Funds: REIT ETFs are a type of investment fund that invests in a diversified portfolio of real estate investment trusts and other real estate-related securities. 

Note: Each type of REIT listed company operates differently and may have different risk profiles, potential REIT returns in India, and share prices. Hence, now that you know how to invest in REITs in India, before investing in REIT shares in India, it’s important to carefully consider your investment objectives, risk tolerance, and the specific characteristics of the real estate investment trust stocks.

Why Invest in a Real Estate Investment Trust (REIT)?

REITs offer a mechanism for private investors to share in the revenue generated by commercial real estate without actually going out and purchasing the commercial real estate. 

REIT companies provide investors with a consistent income stream by investing in properties that generate consistent rental income. This makes them less risky in comparison with other financial instruments. However, like all investments, REITs are subject to market risk.  

The best part about REIT investing is that they provide the benefit of diversification without worrying about the ownership and maintenance of immovable properties. 

So let’s dive in!

1 Crore+ people use smallcase for their investments

Download App

1 Crore+ people use smallcase for their investments

Download App

Key Features of REIT Stocks 

Real estate investment trusts in India present distinct features that make them a noteworthy investment option.

• Real Estate Exposure: REIT listed companies offer investors a way to indirectly invest in real estate without the need for direct property ownership. This allows for diversification without the challenges of property management.
• Regular Income Streams: One of the defining features of REITs is their obligation to distribute a significant portion of their income as dividends. This characteristic makes them an attractive option for investors seeking consistent income.

• Liquidity and Accessibility: Unlike physical real estate, REITs provide liquidity as they are traded on stock exchanges. This makes them easily accessible for investors looking to buy or sell without the complexities of property transactions.
• Professional Management: REIT companies are managed by experienced professionals who handle property acquisition, management, and other operational aspects. This can be appealing to investors who prefer a hands-off approach to real estate investing.

Advantages of investing in REITs

The potential for significant growth in the Indian real estate sector bodes well for REIT companies in India, especially as urbanisation continues to drive demand for commercial and residential spaces.

1) Diversification: Most of the REITs and real estate mutual funds in India are traded on the National Stock Exchange and provide investors with the opportunity to diversify their portfolios. 

2) Liquidity: Since mostly, REIT investment India are traded on stock exchanges, they provide the advantage of instant liquidity to investors. 

3) Steady Cash-flow: Real estate investment trust companies offer risk-adjusted returns to investors and allow them to maintain a steady cash flow, 

4) Transparency: The best reit stocks India are registered with the Securities and Exchange Board of India (SEBI). Hence, they are regulated and transparent. 

5) Attractive Income: Another major benefit of investing in REITs, among other real estate assets is that they provide substantial REIT dividend income to investors. 

Who Should Invest in REITs?

Investing in real estate investment trusts in India is suitable for those seeking exposure to real estate without the burden of property ownership. Individuals with a preference for passive income and diversification may find REIT stocks appealing. They are particularly attractive to investors looking for liquidity and flexibility in real estate investments.

Consider the best REIT in India if:

• Diversification is Key: Investors aiming to diversify their portfolio beyond traditional stocks and bonds can explore REITs to add a layer of real estate diversification.
• Passive Income Seekers: Those in search of regular dividends may find the best REIT stocks in India appealing, among other real estate assets, as they are required to distribute a significant portion of their income to shareholders.
• Risk Tolerance Aligns: Investors comfortable with market fluctuations and real estate market dynamics may find REITs a suitable addition to their portfolio, because of their steady risk tolerance.

Risks of Investing in REITs

As awareness grows, more retail investors are looking into REIT funds in India, recognising them as a viable alternative for portfolio diversification. Investing in real estate investment trusts in India entails several notable risks that investors should carefully consider.

• Tax Implications: REIT dividends typically do not qualify for lower tax rates and may face higher taxes than traditional dividends, affecting overall REIT returns.
• Pass-Through Deduction Complexity: REITs qualify for a 20% pass-through deduction, but it adds tax complexity, especially for those with standard brokerage accounts.

• Interest Rate Sensitivity: REIT prices are sensitive to interest rate changes, with rate hikes often causing price declines.
• Property-Specific Risks: Different types of REITs in India carry unique risks; for example, Hotel REITs may underperform during economic downturns, so investors need to research specific REIT sectors carefully.

Get 500+ Readymade Stock Baskets

Created & managed by SEBI-registered experts

Try smallcase

Get 500+ Readymade Stock Baskets

Created and managed by SEBI-registered experts

Try smallcase

How Returns are Calculated in REITs (Formula)?

Returns from REITs are primarily derived from two key components: dividends and capital appreciation. To calculate the total return on a REIT investment, you can use the following formula:

Total Return (%) = [(Dividends Received + (Selling Price – Purchase Price)) / Purchase Price] x 100

Dividends Received: REITs are required to distribute at least 90% of their taxable income as dividends, making this a significant portion of the return.

Capital Appreciation: This is the increase in the REIT’s share price over time, calculated as the difference between the selling price and purchase price.

By adding the income from dividends and any capital gains, and then dividing by the initial purchase price, investors can calculate their overall return from a REIT investment.

How to Choose the Best REITS for Investing?

Financial experts suggest that incorporating REIT funds in India into a diversified portfolio can enhance returns and provide a hedge against market volatility. However, selecting the right REIT for investment requires careful consideration of several factors to ensure it aligns with your financial goals. Here’s what to look for:

• Dividend Yield: Since REITs are known for their dividends, check the dividend yield, which indicates the income return relative to the price. A consistent and high yield may suggest a reliable income stream.
• Occupancy Rate and Tenant Stability: Real estate investment trust in India with high occupancy rates and stable, creditworthy tenants offer greater income stability. Look for REITs with long-term lease agreements and a diversified tenant base to reduce risks.
• Management Expertise: The success of a REIT often depends on its management team. A skilled management team can strategically acquire and manage properties, ensuring sustainable growth and returns.
• Debt Levels: Assess the REIT’s debt-to-equity ratio to understand its financial health. Lower debt levels typically indicate a more stable and less risky investment, especially during economic downturns or periods of rising interest rates.
• Market Trends and Sector: REITs operate in different sectors such as residential, commercial, or industrial. Consider the market trends and growth potential in each sector. For instance, data center and logistics REITs may offer more growth potential in the digital age. Examining historical trends, REIT investment returns have consistently outperformed traditional asset classes.

Taxation on REITs in India

REIT investments in India are structured to be relatively tax-efficient. Here’s a breakdown of how different types of income from REITs are taxed:

1. Dividends

Dividends distributed by real estate investment trust companies are generally exempt from tax in the hands of the unitholders, provided the REIT has not opted for a concessional tax regime.

2. Interest Income

Interest income received from REITs is taxable at the applicable tax rates for investors. The REIT may withhold tax on this income, typically at 5% for non-residents and 10% for others.

3. Amortisation of SPV Debt

Any income from the amortisation of Special Purpose Vehicle (SPV) debt is exempt from tax in the hands of unitholders.

4. Capital Gains on the Sale of REIT Units

Short-Term Capital Gains (STCG): Gains from selling REIT units within 12 months are taxable as per short-term capital gains tax rates. These gains are taxed at 20%. 

Long-Term Capital Gains (LTCG): Gains on units held for more than 12 months are taxable under long-term capital gains. If the gains are below Rs. 1.25 lakh, they are tax-free. If the gains are above Rs. 1.25 lakh, the gains will be taxed at 12.5% without any indexation benefit. The Union Budget 2024-25 reduced the holding period required for LTCG tax benefits from 36 months to 12 months, enhancing liquidity and investor interest. 

Factors to Consider Before Investing in REITs

Several factors influence REIT investment returns, including property location, market demand, and interest rates. Here are a few factors to consider before investing in REIT funds in India.

1) No Tax Benefit: The REIT dividends earned through the trust is subject to tax. 

2) Highly Volatile: The majority of REITs investment in India is affected by market fluctuations. Therefore, risk-averse investors should analyse the investment’s return-generating capacity before investing.

3) Low Capital Appreciation: In the case of a REIT, the likelihood of capital appreciation is quite low. This is because they only reinvest 10% of their earnings and return about 90% to investors.

To Wrap It Up…

Real estate investment trusts in India may offer a steady flow of funds to investors and provide them with the benefits of diversification. Apart from this, you don’t need a huge amount of funds to begin REIT investing. Hence, if you want to diversify your portfolio, you can start investing in REITs. 

Moreover, conduct extensive research before making any investment to protect yourself against scammers, and make sure that this investment is only a small portion of your overall portfolio.

FAQs

Stocks Under Budget

If you are looking for stocks under a particular price range, here’s the collection of stocks under a specifc budget:

Popular Group of Companies on NSE