What Is a REIT in India? A Complete Guide for Trivandrum Property Investors

Posted onFeb 17, 2026

If you are interested in Trivandrum real estate investment, but don’t have the time to go apartment hunting, look for tenants, and look after the upkeep of the property, then consider investing in REITs.

What is a REIT?

REIT, or Real Estate Investment Trust, is a company that owns, runs, or funds real estate that generates income. Individual investors get access to a diverse portfolio of properties, and they don’t have to own it outright, manage it, or finance it. A REIT is one of the newer types of real estate investment options for small investors.

REIT investment in India was started in 2014, and it offers investors the opportunity to invest in commercial, industrial, and residential properties, giving them income through long-term value appreciation and dividends. REITs help in democratizing real estate investment, helping small investors to be part of large-scale real estate projects. With Trivandrum property investment booming at the moment, REITs are becoming increasingly popular.

REITs in India

REITs in India pretty much work like mutual funds. Capital is pooled from a number of investors, and a portfolio of properties that generate income is created. Professional fund managers are engaged to manage the properties, including leasing and upkeep. 

In India, REITs typically invest in office spaces. The rent collected is distributed among the investors in the form of dividends.

 It is mandatory for REITs to invest a minimum of 75% of their assets in property or related assets. At least 75% of their income must be from rent, capital gains, or interest on property mortgages. They must distribute a minimum of 90% of their taxable income to their investors in the form of dividends. These features make REITs a lucrative and reliable investment for individuals with lower risk appetites and those who desire steady incomes.

Types of REITs 

Equity REITs

The most commonly operating REITs, these focus on owning and managing income-generating real estate assets. Industrial properties, shopping malls, and commercial office spaces are the properties they typically invest in, earning rent from tenants and distributing it among shareholders as dividends.

Mortgage REITs

These REITs don’t actually own property, but finance property owners or purchase mortgage-backed securities and generate income. They are not as popular in India as equity REITs.

Hybrid REITs

A combination of the two REITs mentioned above, which both invest in property and finance it as well. Stringent regulations and less favourable market conditions in India mean less adoption of this model.

Regulation of REITs in India

REITs in India are regulated by SEBI to ensure transparent transactions, along with proper governance and adequate liquidity. REITs can be traded on the stock exchange, and the ownership of the shares can change hands frequently, ensuring liquidity to investors. Anyone with basic awareness of stock market basics in India can manage this easily.

REITs are mandated to invest 75% of their assets in property and generate 75% of their income from it. They must also disclose property valuations and financial standings regularly. Provided that they distribute 90% of their taxable income as dividends to investors, REITs also have the advantage of pass-through taxation.

The Rise of REITs in India

Thanks to rapid urbanization, a growing IT industry, and the spiraling demand for commercial spaces, there is a very high demand for commercial spaces in Trivandrum, which has driven the growth of REITs as an investment avenue. Many big-name commercial property businesses are also venturing into REITs.

The first Indian REIT, Embassy Office Parks REIT, was the first Indian REIT to be launched in 2019, and it set the stage for others to follow suit. Today, there are five major players in the arena, with a combined value of over 2.3 lakh crore rupees.

Advantages of REIT Investment

• Steady income via dividend distributions 
• Portfolio diversification
• Liquidity
• Low entry barriers that allow small investors
• Tax exemptions on income distributed to investors

Risks of REIT Investment

• Subject to market volatility
• Risk of poor decisions if you don’t have the right managers
• Interest rate change sensitivity
• Sector-specific risks include a change in demand for commercial space

Conclusion

The REIT market in India offers a thrilling and lucrative investment opportunity for individuals who want to own real estate other than a flat inTrivandrum. As with any investment opportunity, this avenue is also subject to a few risks, but the benefits of diversification and tax cuts make it a highly attractive option.

Of course, if you’re looking for an apartment for yourself and your family in Trivandrum, look no further than Varma Homes. As one of the best builders in Kerala, all our projects are RERA approved, feature superior construction and innovative amenities, and are located in prime residential neighbourhoods.