REITs or Real Estate Investment Trust can be described as a company that owns and operates real estates to generate income. REITs hold and operate a portfolio of rent-generating commercial buildings, similar to mutual funds that own a portfolio of stocks.

Benefits of REITs over investing in physical Real Estate

1. Instant liquidity 2. Affordability

As an investor in an REIT, you can make money in two ways: through dividends, and the increase in the value of your stock. REITs are mandated to deliver 90 per cent of their portfolio’s net rental revenue as dividends, or interest to their shareholders.

REITs are available for purchase on the stock market in India. REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns.

The three REITs listed in India are - Mindspace REIT, Brookfield REIT, and Embassy REIT

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