Overview of Real Estate Investment Trust (REIT)

The industry of real estate has grown and transformed enormously!

Picture this – earlier when people wanted to buy a house, they would simply spread the word with the help of their friends and relatives.

Then go to check out the place. If it weren’t as per their requirements, they’d check out a few more options before putting their money on the best bet! 

Although this method wasn’t ‘bad’ in any way, it was, however, severely time-consuming, and did not showcase the best places in the market and would not always prove as the best future investment.

Overview of Real Estate Investment Trust (REIT)

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Going ahead, the domain of real estate grew further, and that was when agents came into the picture. This was when it all finally came together as a complete picture.

However, post that phase, the latest that has come into the picture is Real Estate Investment Trust (REIT). 

What is REIT?

In the 
simplest of terms, “An REIT works very much like a mutual fund. It pools funds from a number of investors and invests them in rent-generating properties.” Thus, although this has been a very hot topic in the markets of many Asian countries, it is new in India and is yet to catch up.

If done right, some of the best REIT investments may create stunning opportunities for the sector and help see a side of real estate like never before. Real Estate Investment Trust (REIT) will also help to make fruitful and safe investments in the real estate market in India.

So what do you need to know about Real Estate Investment Trust (REIT) before investing? Well, with REIT, an investor can start with a sum as small as Rs. 2 lakhs.

The entire process has been recognized by the Securities and Exchange Board of India (SEBI). Going ahead, the money from Real Estate Investment Trust (REIT) will be utilized for commercial property investments and then generate income.

While its primary benefits are known, here are the necessary benefits of REIT that will truly change the way the real estate market has been until now:

1. Dividends on Income: 

With 90% distributable cash at least twice a year, one can only imagine the proximity of its benefits to the industry.

Overview of Real Estate Investment Trust (REIT)
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2. Diversification of Receivables: 

Since Real Estate Investment Trust (REIT) requires having to invest in a minimum of two projects whose asset value should supposedly be 60%, there are better chances for a brighter phase to be seen in the industry.

3. Better Risk Cutting: 

In REIT, the rule states that now more than 80% of the assets should become a part of revenue-generating and completed projects.

Overview of Real Estate Investment Trust (REIT)

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4. Easy Liquidity:

With REIT in place, it becomes fairly simple when shares are traded on the stock exchange.

This, in turn, makes the entire process of buying and selling very easy as compared to a property that sees a huge amount in terms of efforts, expertise and expenses.


As compared to purchasing actual property, REIT can be a satisfying option if done right.

However, since it may require some waiting after the money has been put in, a lot of Indians especially may find the idea a bit complex.

If one is willing to count on some patience and trust the rules of Real Estate Investment Trust (REIT), it can definitely turn out to be a promising investment.