Real Estate

REITs in India: What ₹300 Actually Buys in a Grade A Office Tower

Six listed REITs paid ₹3,136 crore last quarter and the cheapest unit costs ₹107. All six yield less than a government bond. The arithmetic, in full.

By The Indian Markets Desk 13 min read

Eleven days from now, a landlord joins the Nifty#

On 30 September 2026, Embassy Office Parks REIT enters the Nifty 500 and the Nifty Midcap 150, along with Nifty Next 100, Nifty Total Market and several 500-series variants. It will be the only real estate investment trust in the Midcap 150. Every index fund tracking those benchmarks will, from that date, own a sliver of office parks in Bengaluru, Mumbai, Pune and the National Capital Region whether its investors intended to or not.

The paperwork behind that began on 28 November 2025, when the Securities and Exchange Board of India reclassified REITs as equity related instruments for mutual funds and specialised investment funds, effective 1 January 2026, and set 1 July 2026 as the earliest date a REIT could enter an equity index.

Less visibly, the money has been moving for a while. In the June 2026 quarter, six listed REITs paid out ₹3,136 crore to more than 485,000 unitholders. The Indian REITs Association puts cumulative distributions since 2019 at over ₹34,800 crore, across 214 million square feet of Grade A office and retail space.

The cheapest way in costs ₹107.

What a REIT is, and what its rule book forces it to do#

A real estate investment trust pools money from investors, buys rent-paying buildings and passes most of the rent back. Its units trade on the NSE and BSE like shares. You need only a demat account. Embassy says on its own investor page that an investor can buy or sell a single unit at a time.

It was not always so easy. Until 2021 a REIT investor had to put in at least ₹50,000 and deal in lots of 100 units. SEBI's July 2021 board memorandum cut the minimum application value to a range of "ten thousand rupees to fifteen thousand rupees" and the trading lot to one unit. Bagmane Prime Office REIT's May 2026 offer, at 150 units priced between ₹95 and ₹100, asked for ₹14,250. After listing, the lot is one.

Four rules do most of the work. Under SEBI's REIT framework a trust must distribute at least 90% of its net distributable cash flow, must hold completed and rent-generating property, cannot borrow beyond 49% of the value of its assets, and needs at least 200 investors.

Three terms recur. Net distributable cash flow, or NDCF, is the cash left after operating costs, interest and tax, and is the pool the 90% rule bites on. Distribution per unit, or DPU, is that pool divided by units. A special purpose vehicle, or SPV, is the company that legally holds each building; the trust owns the SPVs, and money reaches you through them. That last bit of plumbing decides your tax bill.

Six trusts, and what one unit costs#

The full list of REITs in India runs to six names. Embassy, Mindspace, Brookfield India, Knowledge Realty and Bagmane own offices; Nexus Select owns malls. The youngest of them, Bagmane, is a Bengaluru pure-play that listed only in May 2026.

Price of one unit, and the yield it paid last quarter
(quarterly DPU x 4, divided by price; September 2026)

                         Unit price        Annualised yield
Mindspace       ₹493  ███████████████     5.41%  █████████████
Embassy         ₹441  █████████████       5.72%  ██████████████
Brookfield      ₹339  ██████████          6.62%  ████████████████
Nexus Select    ₹166  █████               5.88%  ██████████████
Knowledge Rlty  ₹113  ███                 6.02%  ███████████████
Bagmane Prime   ₹107  ███                 5.61%  █████████████
                      └────┴────┴────┘           └────┴────┴────┘
                      0   200  400  600          0%   3%   6%

Prices are exchange quotes taken between 11 and 19 September 2026. The yields annualise the June-quarter distribution, which assumes the next three quarters repeat it. They will not, exactly.

The six declared ₹6.31, ₹6.67, ₹5.60, ₹2.442, ₹1.70 and ₹1.50 a unit for the June quarter. Those add to roughly ₹3,140 crore, which is the ₹3,136 crore the industry reported, give or take rounding.

Size and quality sit behind those numbers, and they differ. Embassy runs 52.5 million square feet with occupancy of 93% by value. Knowledge Realty holds 46 million square feet at 93% committed occupancy and has grown its unitholder base to over 40,000 since listing in August 2025. Mindspace reported 95.8% committed occupancy across roughly 46.2 million square feet. Nexus Select is a different animal altogether: 19 shopping centres in 15 cities, 10.7 million square feet, about 1,100 brands, with tenant sales up 17% over the year. Office REITs live off lease renewals. Nexus lives off how much people spend in malls, which is a different risk wearing the same label.

Yields sit in a narrow band between 5.41% and 6.62%. Prices do not. A Mindspace unit costs 4.6 times a Bagmane unit and that tells you nothing about value: unit price reflects how a trust chose to slice itself, not what a square foot is worth.

Where the cash comes from, and what the taxman takes#

What arrives in your bank account#

A REIT distribution is not one thing. It arrives in components, and each is taxed differently. Mindspace's ₹6.67 for the June quarter, for instance, split as ₹3.34 of dividend and ₹3.33 of debt repayment.

Embassy's investor page sets out the treatment. Interest from the SPVs is taxable at your slab rate, with 10% withheld at source for residents. Dividend is exempt in your hands unless the SPV has opted for the lower corporate tax regime. Amortisation of SPV debt, sometimes called repayment of capital, is not taxed when received, but it reduces your cost of acquisition, so it surfaces later as capital gain. Other income, earned on deposits and fund units, is exempt.

The consequence is awkward. A 6% headline yield can be worth 6% after tax to one investor and closer to 4% to another in the 30% bracket, depending entirely on the mix. Two REITs paying identical DPUs are not paying identical money.

What you pay when you sell#

Selling is simpler. Units of a business trust get the 12-month holding period rather than 24. Beyond a year, gains fall under section 112A, where amounts above ₹1.25 lakh a year are taxed at 12.5%. Sell sooner and the rate is 20%. The pass-through architecture itself sits in section 115UA, which deems distributed income to keep "the same nature and in the same proportion" it had inside the trust.

A 5.7% yield, against a 7.05% government bond#

One number should slow anyone down. On 18 September 2026 the Indian 10-year government bond yielded 7.05%. Every listed REIT yields less than that, on an asset carrying no sovereign guarantee.

The counter-argument, and it is an argument rather than a fact, is that a bond coupon is fixed while rent is not. Mindspace's DPU rose 15.2% over the year; Nexus Select's rose 10%; Embassy has guided to ₹27.00 to ₹28.60 a unit for FY2027, roughly 10% growth at the midpoint. Whether that growth holds is a forecast, not a record.

The market around them is steady rather than tight. Colliers expects 70 to 75 million square feet of gross leasing in 2026 against 60 to 65 million of new supply, with vacancy near 15%, and global capability centres to take 40% to 50% of Grade A demand. That concentrates the bet on one kind of tenant. Bagmane is the sharpest version of it: at the time of its offer, foreign occupiers accounted for 98.7% of its rental income, and its committed occupancy of 98.7% in June 2026 was the highest of the six.

Debt is the variable most retail buyers skip. SEBI allows borrowings up to 49% of assets, and the six sit well below it, but not at the same place: Nexus Select and Knowledge Realty both report loan to value of 18%, while Embassy carries net debt at 31% of gross asset value. Lower leverage means a smaller distribution today and more room to buy when something good comes up for sale. Higher leverage does the reverse, and costs more every time the Reserve Bank leaves rates where they are. Brookfield's ₹1,700 crore Bandra-Kurla Complex purchase and Nexus's ₹1,600 crore Guwahati mall and hotel deal, announced on 9 September 2026, both have to be funded from somewhere, and that choice shows up in next year's DPU.

Prices move as well. Embassy has traded between ₹400 and ₹462 over the past year, Nexus between ₹143 and ₹175. The Nifty REITs & InvITs Index returned 12.93% in the year to 31 August 2026. A REIT owns buildings but trades like a security, and it reprices like one.

What ₹300 does not buy#

Three hundred rupees buys one unit of Knowledge Realty Trust and one of Bagmane, with ₹80 left over. Set against Knowledge Realty's 46 million square feet and roughly 4.4 billion units, ₹300 is a claim on about 0.028 square feet, close to the face of a credit card. Nobody is buying a room here. What is on offer is a small, listed, professionally managed claim on rent.

It comes without control. You do not pick the tenant, the refurbishment or the day the building is sold. There is no home-loan leverage of the kind a flat buyer takes for granted. Nor does it get you into the fractional-ownership schemes advertised online, which now sit under SEBI's separate framework for small and medium REITs, where the minimum is ₹10 lakh a unit for schemes holding ₹50 crore to ₹500 crore of assets.

What it does buy is liquidity, quarterly disclosure and a payout rule a regulator enforces. For a freelancer with ₹20,000 to place and no appetite for a second flat, that is a different proposition from the one available in 2019. Whether the price is right today is a separate question, and this article does not answer it.

Key takeaways#

  1. From 30 September 2026 Embassy REIT becomes the first REIT in the Nifty 500 and Nifty Midcap 150, following SEBI's reclassification of REITs as equity related instruments.
  2. One unit is the trading lot. The cheapest listed REIT unit costs about ₹107, and the entry ticket in a new REIT offer is capped at ₹10,000 to ₹15,000.
  3. The six listed REITs yield between 5.41% and 6.62% on annualised June-quarter distributions, all below the 7.05% yield on the 10-year government bond.
  4. Distributions arrive as interest, dividend, repayment of debt and other income, each taxed differently. The headline yield is not the post-tax yield.
  5. Unit prices are set by the market, not by valuers. Embassy moved between ₹400 and ₹462 in a year.

Frequently asked questions#

How do I actually buy a REIT in India? Through a normal demat and trading account, exactly like a share, in lots of one unit. The six tickers are EMBASSY, MINDSPACE, BIRET, NXST, KRT and BAGMANE.

Is a REIT better than buying a flat to rent out? They are different instruments. A REIT is liquid, small-ticket and taxed as a security; a flat is illiquid, large-ticket, financed with a home loan and yours to control. This article recommends neither.

Are REIT distributions guaranteed? No. SEBI requires at least 90% of net distributable cash flow to be paid out, not that any particular amount is earned. Vacancy, rent renegotiation and interest costs all move it.

Why is the dividend yield on stock websites so low? Because screeners often count only the dividend component and ignore interest and repayment of debt. Use the REIT's declared distribution per unit instead.

Do I pay tax if I never sell? Usually yes. Interest and any other income components are taxable in the year you receive them, with 10% withheld at source. Repayment of debt is not taxed then, but it reduces your cost and raises the eventual capital gain.

Can mutual funds buy REITs now? Yes, and since January 2026 they may count them as equity related instruments. Dedicated benchmarks have followed, including the Nifty REITs & Realty Index launched on 2 March 2026.

What is the difference between a REIT and an SM REIT? Scale and access. A listed REIT holds hundreds to tens of thousands of crores and trades in single units. An SM REIT scheme holds ₹50 crore to ₹500 crore, with a minimum investment of ₹10 lakh.

Glossary#

REIT. A trust that owns income-producing property and lists its units on a stock exchange.

Net distributable cash flow (NDCF). Cash available for distribution after operating costs, interest and tax. At least 90% must be paid out.

Distribution per unit (DPU). The cash paid per unit in a quarter or a year. The REIT equivalent of a dividend, though not all of it is a dividend.

Special purpose vehicle (SPV). The company holding an individual property. The trust owns SPVs, and cash reaches unitholders as interest, dividend or repayment.

Loan to value (LTV). Borrowings as a share of asset value. SEBI caps REIT borrowings at 49% of assets.

Committed occupancy. Space leased or signed but not necessarily yet occupied, as against area physically in use.

Grade A office. Market shorthand for the best specification of commercial building, by fit-out, services, power backup and location.

Section 112A. The provision taxing long-term gains on listed shares and business trust units above ₹1.25 lakh at 12.5%.

References#

  1. Securities and Exchange Board of India, Reclassification of REITs as equity related instruments, circular HO/24/13/12(1)2025-IMD-POD-2/I/157/2025, 28 November 2025
  2. Securities and Exchange Board of India, Frequently Asked Questions for Real Estate Investment Trusts
  3. Securities and Exchange Board of India, board memorandum on minimum subscription and trading lot for REITs and InvITs, July 2021
  4. Securities and Exchange Board of India, Framework for Small and Medium REITs: frequently asked questions, September 2024
  5. Securities and Exchange Board of India, Revised framework for computation of Net Distributable Cash Flow by REITs, 6 December 2023
  6. Income Tax Department, tax on long-term capital gains: the 12-month holding period for business trust units and the ₹1.25 lakh threshold
  7. Income Tax Act 1961, section 115UA
  8. Embassy Office Parks REIT, Q1 FY2027 earnings presentation, 30 July 2026
  9. Embassy Office Parks REIT, how to invest, and the taxation of distributions
  10. Nexus Select Trust, Q1 FY27 earnings update, 3 August 2026
  11. Knowledge Realty Trust, Q1 FY27 earnings update
  12. NSE Indices, Nifty REITs & InvITs Index factsheet, 31 August 2026
  13. NSE Indices, launch of the Nifty REITs & Realty Index, 2 March 2026
  14. Indian REITs Association, industry data on assets, market capitalisation, unitholders and distributions
  15. Business Standard, six listed Indian REITs distribute ₹3,136 crore in Q1 FY27, 17 August 2026
  16. Business Standard, Embassy REIT to enter Nifty 500 and Nifty Midcap 150 from 30 September, 12 August 2026
  17. Business Standard, Mindspace REIT Q1 FY27: net operating income up 27.8%, DPU ₹6.67, 5 August 2026
  18. PropNewsTime, Brookfield India REIT Q1 FY27: DPU ₹5.60, net operating income ₹756.6 crore
  19. Business Standard, Nexus Select Trust to acquire a Guwahati mall and hotel for ₹1,600 crore, 9 September 2026
  20. Colliers, India office market forecast for 2026, 18 March 2026
  21. Trading Economics, India 10-year government bond yield, 18 September 2026
  22. ICICI Direct, unit price quotes for listed REITs and Bagmane Prime Office REIT offer terms
  23. Screener.in, closing unit prices for Embassy, Nexus Select, Knowledge Realty and Bagmane, 17 and 18 September 2026
  24. Kotak Neo, unit price quotes for Bagmane Prime Office REIT and Nexus Select Trust
  25. Bagmane Prime Office REIT, Q1 FY27 earnings call transcript, 12 August 2026
  26. Google Ads search volumes for India, retrieved through DataForSEO, 19 September 2026

This article is journalism, not investment advice. Prices and yields quoted were those available between 11 and 19 September 2026 and change daily. Verify current figures and your own tax position before acting, and consult a qualified adviser about your circumstances.

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