Top REIT Stocks in India: Real Estate Investment Trust or REIT is an investment trust that owns, operates, and finances real estate with the main aim of generating income.
REITs manage a portfolio of real estate assets that are high value and generate steep rent and leases. REITs generally look for small as well as large investors who want to park their money in real estate without having to buy or manage the property themselves.
Real Estate can be a good investment option because it allows investors to diversify their portfolio beyond bonds and stocks. Additionally, REIT shares are attractive due to Strong dividends and Long-term capital appreciation.
The Indian commercial real estate sector outperformed during FY2023. The demand for quality spaces witnessed an increase on account of the growing return-to-office trend and improving tenant confidence.
Even the Market regulator SEBI is showing interest in the REITs as they have decided to promote investments through Small and Medium REITs (SM REITs).
The SEBI Board approved amendments to REITs (Real Estate Investment Trusts) Regulations, 2014 to create a regulatory framework for the facilitation of SM REITs, with an asset value of at least Rs. 50 crores about a minimum asset value of Rs. 500 crores for existing REITs.
According to the recent developments the SEBI Chairperson Madhabi Puri Buch said “The objective of the Small and Medium Real Estate Investment Trusts is to help expand the market significantly so that more retail investors can have fractional ownership in REIT units. She also said the regulator is open to looking at creating more such products”.
In this article about Top REIT Stocks in India, we shall see the reasons why investors find benefits from investing and list of stocks.
Table of Contents
Reasons Investors Benefit from Investing in REITs
● Diversification: Most REITs are traded on the National Stock Exchange and provide investors with the opportunity to diversify their portfolio and to invest beyond bonds and stocks.
● Liquidity: Most REITs are traded on stock exchanges, and they provide the advantage of instant liquidity to investors.
● Transparency: REITs are registered with the Securities and Exchange Board of India (SEBI). Hence, regulated by SEBI, reducing the chances of fraud.
● High Dividend yield: Assured dividend payment through rental income and the company has to distribute at least 90 percent of the rental income to its unit holder in the form of dividends.
● Affordable investment: Shares of REITs are comparatively affordable, where most of the REITs are available for under Rs. 300.
Top REIT Stocks in India
Embassy Office Park REIT
The shares or units of Embassy Office Park REIT were listed at Rs. 328.02 and as of November 28, 2023, the units were trading at Rs. 327 apiece.
Looking at the company’s financials, the revenue increased by 15.7 percent from Rs.3,052 crores during FY22 to Rs. 3,531 crores in FY23. On a contrasting note, the net profit declined by 43.05 percent from Rs. 888.39 crores to Rs. 505 crores during the same timeframe.
Furthermore, the company declared a distribution of Rs. 2,057 crores or Rs. 21.7 per unit during FY23.
Coming onto the important ratios, the Weighted Average Lease Expiry(WALE) i.e., the average expiry period of all the leases within the property was recorded at 6.6 years, the occupancy rate was at 86 percent, and the dividend yield was at 6.89 percent as of FY23.
Blackstone Group-backed Embassy REIT is India’s first publicly listed Real Estate Investment Trust. Embassy REIT owns and operates a 45.3 million square feet (“MSF”) portfolio of nine infrastructure-like office parks and four city-center office buildings in India’s best-performing office markets of Bengaluru, Mumbai, Pune, and the National Capital Region.
Mindspace Business Park REIT
The shares or units of Mindspace Business Park REIT were listed at Rs. 303.87 and, as of November 28, 2023, the units were trading at Rs. 316 apiece.
Looking at the company’s financials, the revenue increased by 6.42 percent from Rs. 1,201 crores during FY22 to Rs. 1,278 crores in FY23. In addition, the net profit increased by 4 percent from Rs. 1,103 crores to Rs. 1,149 crores during the same timeframe.
Furthermore, the company declared a distribution of Rs. 1,132 crores or Rs. 19.1 per unit in FY23.
Coming onto the important ratios, the Weighted Average Lease Expiry (WALE) the average expiry period of all the leases within the property was recorded at 7 years, the occupancy rate was at 88.30 percent, and the dividend yield was at 6.90 percent as of FY23.
The company portfolio comprises five integrated business parks and five quality independent offices, totaling 32.3 million square feet of total leasable area, comprising 26.1 msf of completed area, 2.9 msf of under-construction area, and 3.3 msf of the future development area.
Brookfield India REIT
The shares or units of Brookfield India REIT were listed at Rs. 258.96 and, as of November 28, 2023, the units were trading at Rs. 247.6 apiece.
Looking at the company’s financials, the revenue increased by 36 percent from Rs. 877 crores during FY 21-22 to Rs. 1197 crores in FY 22-23. On a contrasting note, the net profit declined by 46 percent from Rs. 246 crores to 131 crores during the same timeframe.
Furthermore, the company declared a distribution of Rs. 678 crores or Rs. 20.20 per unit in FY23.
Coming onto the important ratios, the Weighted Average Lease Expiry (WALE) i.e., the average expiry period of all the leases within the property was recorded at 6.8 years, the occupancy rate was at 88 percent, and the dividend yield was at 6.8 percent as of FY23.
The company portfolio consists of 25.3 million square feet of total leasable area, comprising 20.7 million square feet of operating area, 0.7 million square feet of under-construction area, and 3.9 million square feet of future development potential.
Written By Vaibhav Patil
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