A real estate investment trust (REIT) is a type of investment fund that owns and operates income-generating real estate properties. REITs invest in a range of real estate assets, such as commercial office buildings, residential properties, shopping malls, hotels, and industrial warehouses.
REITs are designed to provide investors with an opportunity to invest in real estate without owning and managing the properties themselves. REITs allow investors to purchase shares of the fund and receive a portion of the income generated by the real estate properties in the form of dividends. In addition to dividends, the value of the shares can appreciate or depreciate in response to market conditions.
REITs are required to distribute at least 90% of their taxable income to shareholders annually in the form of dividends, which makes them an attractive option for investors seeking regular income. Additionally, REITs can provide portfolio diversification and potential tax benefits.
There are different types of REITs, including equity REITs that invest in physical properties and mortgage REITs that invest in mortgages or mortgage-backed securities. There are also publicly traded REITs that are listed on major stock exchanges and non-traded REITs that are sold through broker-dealers.
Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India Real Estate Trust are examples of publicly listed real estate investment trust’s in India.