Best REIT Stocks in India (2025)

What are REITs?

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing properties like commercial buildings, residential complexes, retail spaces, and warehouses. REITs offer individuals a way to invest in large-scale, income-generating real estate assets. These companies are governed by SEBI, ensuring compliance and transparency.

Overview of 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. It is known for its diversified tenant mix and strategic locations.
• Mindspace Business Parks REIT: Mindspace Business Parks REIT focuses on Grade A office spaces across key metropolitan cities, catering to a mix of multinational and domestic tenants.
• Embassy Office Parks REIT: Embassy Office Parks REIT is India’s first publicly listed REIT, popular for its premium office spaces and large-scale integrated business parks.
• Brookfield India Real Estate Trust: Brookfield India REIT manages a portfolio of commercial office spaces, strategically located in major business districts.

Types of REITs in India

• Equity: Equity REITs primarily focus on running and overseeing commercial buildings that produce income. Rent is a major source of income in this area, making REITs in India a popular investment choice.
• Mortgage: Mortgage REITs, commonly known as “mREITs,” are associated with lending money to proprietors and extending mortgage facilities. These SEBI-registered REITs earn income by charging interest on the funds they lend to business owners.
• Hybrid: Hybrid REITs allow investors to diversify their portfolios by investing in both equity and mortgage REITs.
• Private REITs: Private REITs are real estate funds or companies that are not traded on national securities exchanges and are not registered with the SEBI REITs regulations in India.
• Publicly traded REITs: Real estate investment trust shares are traded on the National Securities Exchange and registered with the Securities & Exchange Board of India.
• Public non-traded REITs: Non-traded REITs that are publicly traded are not traded on the National Stock Exchange but are registered with SEBI.

How to Invest in REIT Stocks in India?

Benefits of investing in REIT Sector Stocks

• Diversification: Most of the REITs and real estate mutual funds in India are traded on the National Stock Exchange and provide investors with exposure to the real estate sector.
• Liquidity: Since most REIT investments in India are traded on stock exchanges, they provide the advantage of instant liquidity to investors.
• Steady Cash Flow: Real estate investment trust companies offer risk-adjusted returns to investors and allow them to maintain a steady cash flow.
• Transparency: The REIT stocks in India are registered with the Securities and Exchange Board of India (SEBI). Hence, these SEBI-registered REITs are regulated and transparent.
• 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 REIT Industry Stocks?

• Investors Looking to Diversify: Those looking to broaden their portfolios beyond traditional stocks and bonds may find REITs in India provide an opportunity to add real estate exposure.
• Passive Income Seekers: As SEBI-registered REITs are required to distribute a significant portion of their income. They could potentially offer regular dividend payments to investors seeking passive income.
• Risk Tolerance Aligns: For those who are comfortable with the dynamics of the REITs market in India. This asset class might align with their risk tolerance due to its moderate level of market exposure.

Risks of Investing in REIT Stocks

• 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.

Factors to Consider Before Investing in REIT Stocks

• No Tax Benefit: The REIT dividends earned through the trust are subject to tax.
• Volatility: The majority of REIT investments in India are affected by market fluctuations. Therefore, risk-averse investors should analyse the investment’s return-generating capacity before investing.
• Low Capital Appreciation: In the case of REIT stocks, the likelihood of capital appreciation is quite low compared to other sectors. This is because they only reinvest 10% of their earnings and return about 90% to investors.