In 2025, Real Estate Investment Trusts (REITs) have emerged as a powerful vehicle for mutual funds to diversify portfolios and access India’s thriving commercial real estate market. With regulatory support and a maturing ecosystem, mutual funds are increasingly allocating higher proportions of assets into REITs—offering investors exposure to income-generating real estate with the added advantage of liquidity. Let’s explore the top 5 REITs gaining momentum among mutual funds and how each is uniquely positioned to benefit from this growing demand.
Backdrop: SEBI’s Regulatory Green Light
The Securities and Exchange Board of India (SEBI) recently proposed amendments that allow mutual funds to increase their exposure to REITs and Infrastructure Investment Trusts (InvITs). These proposed changes include:
- Raising the individual issuer exposure limit for equity and hybrid mutual funds from 5% to 10%
- Increasing the overall exposure cap from 10% to 20%
Why REITs Are Gaining Favor
REITs are structured to distribute a large share of their rental income (usually 90%) as dividends, making them attractive for steady income. Listed on stock exchanges, they offer the ease of trading just like equity stocks. For mutual funds, this means access to premium real estate assets without dealing with property management or illiquidity. The fact that REITs span across office parks, retail malls, and urban business centers makes them versatile instruments in today’s investment landscape.
Top 5 REITs Mutual Funds Are Betting On
1. Embassy Office Parks REIT: India’s first publicly listed REIT, Embassy Office Parks, remains a top choice for institutional investors. With a Grade-A portfolio of over 42 million square feet across Bengaluru, Mumbai, Pune, and NCR, this REIT dominates India’s office space segment.
Why Mutual Funds Love It:
- Backed by marquee tenants like IBM, Microsoft, and Google.
- Maintains average occupancy levels above 85%.
- Offers consistent dividend payouts and operational stability.
- Strong sponsor pedigree—jointly owned by Embassy Group and Blackstone.
2. Mindspace Business Parks REIT: Mindspace REIT manages over 30 million square feet of office space, with a strong presence in Mumbai, Pune, Hyderabad, and Chennai. Its business parks cater to IT/ITES, financial services, and consulting firms.
Why Mutual Funds Love It:
- Focus on long-term leases with blue-chip tenants.
- Resilient cash flow supported by high occupancy.
- Diversified tenant base across tech and finance sectors.
- Regular quarterly distributions.
3. Brookfield India Real Estate Trust: Brookfield REIT is the only institutionally managed REIT in India with a 100% leased office portfolio. It spans over 25 million square feet of commercial real estate across key metros like Mumbai, Noida, Kolkata, and Gurgaon.
Why Mutual Funds Love It:
- Fully leased assets mean predictable income.
- Backed by Brookfield Asset Management, a global real estate leader.
- Strong tenant mix from sectors like BFSI, IT, and consulting.
- Emphasis on corporate governance and ESG compliance.
Also read: Best Medium Duration Mutual Funds You’re Missing Out On in 2025!
4. Nexus Select Trust: India’s first retail-focused REIT, Nexus Select, owns and operates around 10 million square feet of urban consumption centers (malls) spread across cities like Delhi, Bengaluru, Pune, and Navi Mumbai.
Why Mutual Funds Love It:
- Unique play on India’s retail consumption boom.
- Strong partnerships with global and domestic retail brands.
- Resilient revenue through long-term retail leases and footfall-linked income.
- Well-managed debt structure and operational efficiency.
5. DLF Cyber City Developers REIT (Proposed Listing): Backed by DLF Ltd., India’s largest listed real estate developer, this REIT is expected to make a grand entry in 2025. It will likely include assets from DLF’s premium commercial real estate portfolio, primarily in Gurugram’s Cyber City.
Why Mutual Funds Are Interested:
- High-end office properties with long-term tenants.
- Strong rental growth potential.
- Trusted brand with proven development capabilities.
- First mover advantage in NCR’s most premium business location.
Incorporating these REITs into mutual fund strategies offers a compelling blend of real estate exposure, professional management, and consistent income. For investors—both institutional and retail—it’s a signal that real estate is no longer a static, brick-and-mortar asset, but a dynamic and tradable opportunity for long-term growth.
Written by Pydimarri Hema Harshini
