Real Estate Investment Trusts (REITs) are investment vehicles that allow individuals to invest in income-generating real estate assets without directly owning or managing properties. They pool funds from multiple investors to invest in commercial real estate such as offices, malls, warehouses, and hotels, providing investors with regular income and potential capital appreciation.

Introduced in India under the regulations of the Securities and Exchange Board of India (SEBI), REITs offer transparency and accessibility in real estate investments. Investors can buy units of a REIT just like shares in a company, which are listed and traded on stock exchanges. This allows even small investors to participate in the real estate sector with relatively low capital.

REITs primarily earn through rental income from leased properties, and a major portion—typically at least 90% of distributable cash flows—must be distributed to investors as dividends. This ensures steady and predictable returns. Additionally, since REITs are professionally managed, investors benefit from expert asset management and reduced operational responsibilities.

There are different types of REITs such as Equity REITs (own and operate properties), Mortgage REITs (invest in real estate debt), and Hybrid REITs (a combination of both). In India, Equity REITs are the most common. Investors can analyze a REIT’s performance based on factors like occupancy rate, rental yield, and Net Asset Value (NAV).

In summary, REITs provide a structured and regulated way to invest in the real estate sector with liquidity, diversification, and steady income potential. However, like all investments, they carry market risks and should be chosen based on one’s financial goals, risk appetite, and investment horizon.