Moneycontrol Pro Panorama | Rising trust in India’s REIT landscape

REITs have a diverse mix of assets that reduce the risk to investors

Dear Reader,

India’s Real Estate Investment Trust (REIT) landscape is buzzing with activity as both investors and promoters find it a win-win game.

Media headlines this morning drew attention to Brookfield’s REIT acquiring Ecoworld, a Grade-A office campus for a whopping ₹13,125 crore. While this is a landmark deal both in size and quality of assets, it is not the only one. A few months earlier, Mindspace REIT acquired Q-City in Hyderabad. Blackstone-backed Nexus Select Trust, while announcing its Q2FY26 results, indicated a pipeline of acquisitions that would nearly double the number of malls under its umbrella.

These deals indicate the growing appetite of the REIT sponsors and promoters in the country’s commercial and retail property market. It also provides an avenue for relatively smaller entities in the segment to exit profitably, preventing financial stress in the sector. Importantly, such mega deals reiterate investor confidence, along with prospects of earning returns.

Q2FY26 results announced so far portray healthy returns -- Embassy, Mindspace and Brookfield clocked a 10-12 percent year-on-year rise in distribution per unit. Note that REITs in India are mandated to distribute a minimum of 90 percent of the net retained profits, to the unitholders. Besides, savvy investors who trusted these new instruments early in the day have earned handsome returns -- about 12-22 percent in one year and upwards of 25 percent in three years. The recently listed Knowledge Realty Trust too is trading above its listing price.

What sets REITs apart from a regular commercial asset developer/owner is that REITs operate functional assets that are generating income by way of leasing of space. They also have a diverse mix of assets that reduce the risk to investors.

A recent update by realty consultant Knight Frank points out that by 2030, India’s REIT market, including office, retail and warehousing sectors, is projected to reach Rs 19.7 trillion (from Rs 10.4 trillion in 2025), driven by high occupancy, favourable taxation, and broader sectoral inclusion. Furthermore, rising investor trust could see the scope of REITs expand to diversify beyond traditional asset classes like office, retail, and warehousing, to industrial parks, data centres, and hospitality over time. This would also help investors diversify their exposure to the realty sector.

One must add here that the capital markets regulator, Securities & Exchanges Board of India, has over time simplified the structure and tax regulations around REITs, making it more accessible for retail investor participation. Of course, the risks surrounding an asset class, in this case, the real estate market and its cyclicality cannot be obliterated for an investor.

Investing insights from our research team

SBI delivers strong Q2 FY26 with positive margin surprise

Sun Pharma Q2 steady — Should investors pop the stock pill?

Indigo’s Q2 FY26 results take a low flight path

Indian Hotels Company: Q2 FY26 growth moderates, but robust outlook for H2

Urban Company Q2 FY26: Growth intact, but margins under pressure

SJS Enterprises: The earnings momentum remains strong in Q2

What else are we reading?

IMF sees India’s fiscal deficit stalling after FY26

Why brokers are demanding Bank Nifty's return

RBI’s huddle with dealers: Liquidity tightening or signalling risk control?

Chart of the Day | L&T’s rising overseas orders -- more to flow?

Startup Street: Will the government’s mega RDI scheme boost innovation in startups?

Data Story: Long haul for e-buses to make a mark on Indian roads

Nvidia’s Jensen Huang says China ‘will win’ AI race with US (republished from the FT)

Bihar Votes: Women voters likely to stick to the tried and tested Nitish Kumar's promises

Ensuring a Level Playing Field: How regulation can prevent AI from stifling competition

Pakistan’s Taliban miscalculation

Markets

Morningstar’s Mike Coop weighs on emerging investing opportunities, AI, commodities and tariffs

Tech and Startups

Inside Maya Research: How two 23-year-olds beat Google in speech AI and are building a 10 to 15x larger Indic version by June 2026

Technical Picks: APLAPOLLO, NUVAMA, BAJAJ AUTO

 Vatsala Kamat
Moneycontrol Pro