Reits revolution: own a slice of malls, offices with just ₹500

Think mutual funds, but for real estate. That's how Pratik Dantara, executive committee member of the Indian Reits Association, explains Real Estate Investment Trusts (Reits)-a growing investment avenue giving retail investors exposure to office parks, malls, and other commercial properties.

- Aprajita Sharma

Speaking at the Mint Money Festival, Dantara highlighted the tax benefits and the potential of this relatively young but thriving asset class.

Reits pool money from investors to own and operate income-generating properties, Dantara explained. The income generated is distributed among investors. Most Reits do not own properties directly but hold stakes in special purpose vehicles (SPVs), which in turn hold the assets.

What investors gain

Reits operate under a structure tightly regulated by the Securities and Exchange Board of India (Sebi). They generate rental income shared with unitholders as dividends, and investors also benefit when the underlying properties appreciate in value.

"Reits are mandated to distribute 90% of profits to unitholders every six months; 80% of assets must be rent-generating and leverage cannot exceed 49%. This ensures robust corporate governance," said Dantara.