Have India’s REITs Delivered? What Retail Investors Should Know in 2025

When India launched its first Real Estate Investment Trust (REIT) in April 2019, experts had suggested it could be a smart play for retail investors seeking dividend income and access to high-quality office spaces. Nearly six years later, with four REITs—three in office and one in retail—listed on Indian stock exchanges, it’s worth revisiting whether these instruments have truly delivered on their early promise.

Dividend Distributions: Steady but Not Spectacular

The four REITs cumulatively distributed ₹6,070 crore in FY25, registering a 13% increase from the previous fiscal year. While the figure appears impressive, a closer examination reveals a more nuanced reality for investors depending on when they entered the market.

Price Performance: Not All REITs Are Equal

Embassy Office Parks REIT, the pioneer in the Indian REIT space, has shown muted growth, moving from ₹300 at debut to around ₹385—a modest ~4% annualised gain in unit price over six years.

Brookfield India REIT, launched in 2021 at ₹275, has only appreciated to ₹299, giving a minimal ~2% annualised return. In contrast, Mindspace Business Parks REIT has fared better, climbing from ₹275 in August 2020 to ₹395, implying a ~7.5% annualised capital gain.

All three office REITs have offered dividend yields between 6% and 6.5%, taking total annualised returns to roughly 8.5% for Brookfield and around 13% for Mindspace.

Retail REIT Steals the Show

The most notable performer has been Nexus Select Trust, India’s only listed retail REIT. Since listing at ₹100 two years ago, its units have appreciated to ₹131—a solid 14% annualised gain. When combined with a 6.5% dividend yield, total investor returns stand at an attractive 21% per annum.

Investor Takeaways: Timing and Caution Are Key

• REITs are not passive investments. Holding on to an underperforming REIT can restrict returns to 8.5% per year—better than fixed deposits but on par with debt mutual funds, and still subject to market volatility.
• Entry timing matters. Investors who bought Embassy REIT at its ₹467 peak or Nexus Select at ₹150 are yet to recover losses, even with steady dividends.
• Initial dividend yield expectations of 7.5–8% have since moderated to around 6%. While consistent, they’re not game-changing.

Occupancy Challenges Linger

Occupancy in office REITs remains below pre-pandemic levels. Embassy REIT and Brookfield REIT are currently at 87% and 88% occupancy, respectively, compared to 95% at launch. Only Mindspace has managed to recover, with occupancy above 91%.

Moreover, the market continues to rely on gross leasing figures rather than net leasing, which would offer a more accurate picture of tenant inflow and exit.

Concerns Over Asset Transfers and Valuation Transparency

There’s ongoing concern over asset transfers between REIT sponsors and the REITs themselves. Since sponsors like Embassy Group, Brookfield, and K Raheja control both the REIT and the assets, questions arise over whether transferred properties are fairly priced. While some transactions in the past year—such as Embassy Splendid TechZone and Candor TechSpace N2—were claimed to be below market value, there is little independent validation of these valuations.

This overlap has raised calls for greater transparency and independent scrutiny to protect retail investors.

Final Word: Diversifier, Yes—Gamechanger, No

REITs can add stability to a stock-heavy portfolio, offering steady income and exposure to real estate. However, they’re far from being a silver bullet. Performance varies sharply based on asset class, sponsor integrity, and market timing. Investors looking at REITs should treat them as semi-active investments that require monitoring, not blind faith.

Disclaimer: This news article is for informational purposes only and should not be construed as financial advice. Investors are advised to consult with their financial advisor before making investment decisions.