Listed REITs Distribute ₹2,754 Crore to Unitholders in H1 FY25, Recording 14% Growth: IRA
Unitholders of India's four listed Real Estate Investment Trusts (REITs) received a total of ₹2,754 crore in the first half of the current financial year, marking a 14% increase compared to ₹2,417 crore in the same period last year. This growth shows that REITs are becoming a popular choice for investors looking for stable income.
The four REITs in India, Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust, distribute income to unitholders through dividends and other payouts. In the second quarter of FY24, these REITs together distributed over ₹1,383 crore to more than 255,000 unitholders. In the first quarter of FY24, they paid out ₹1,371 crore to around 245,000 unitholders.
According to data from the Indian REITs Association (IRA), the total value of assets managed by these REITs has now crossed ₹1.52 lakh crore. Since their launch five years ago, these REITs have expanded their portfolios to cover over 125 million square feet of office and retail space in major cities across India.
Government Reforms to Attract More Investors
The IRA also welcomed recent government changes that are expected to encourage more people to invest in REITs. The government has reduced the holding period for long-term capital gains (LTCG) tax on REITs and Infrastructure Investment Trusts (InvITs) from 36 months to just 12 months. This change is expected to make REITs more attractive to investors and improve market liquidity.
The IRA, a non-profit organization supported by the Securities and Exchange Board of India (SEBI) and the Ministry of Finance, represents the interests of the REIT industry. Its founding members include the four major listed REITs in India.
With growing returns and increasing interest from both individual and institutional investors, the Indian REIT market is set for continued growth in the years ahead.
What Are REITs?
Real Estate Investment Trusts (REITs) are companies that own, operate, or finance income-generating real estate. They provide a way for individuals to invest in large-scale, income-producing properties without having to buy or manage real estate directly. REITs are designed to generate steady income for investors while also offering opportunities for capital appreciation.
- REITs typically pay out at least 90% of their taxable income to shareholders as dividends, making them an attractive investment for income-seeking investors.
- REITs often invest in various property types, including, residential, commercial, industrial, healthcare and speciality.
- Unlike direct real estate investments, publicly traded REITs are traded on stock exchanges, making them easy to buy or sell.
- Properties are managed by experienced professionals, eliminating the need for individual involvement in property management.
- Investing in REITs provides exposure to the real estate market without the risks and responsibilities of direct ownership.
