SEBI Classifies REITs as Equity: A Major Boost for Indian Real Estate
SEBI's decision to classify Real Estate Investment Trusts (REITs) as 'equity' is a significant step that will enhance investor participation and deepen the REIT market in India.
SebiReitsIndian Real EstateMutual FundsEquityReal Estate NewsSep 15, 2025
Industry experts, including top officials from listed REIT entities, have hailed the decision, stating that it will boost overall investment in the real estate sector and lead to the listing of more REITs in India. REITs are investment vehicles that own or operate income-generating real estate, allowing investors to earn a share of the income produced without directly purchasing the properties.
The Indian REITs Association (IRA) has welcomed the decision, noting that it marks a significant milestone in strengthening the REIT ecosystem in India and aligns with global best practices where REITs are part of equity indices. 'This decision is a step forward that will contribute to enhancing the depth of the REIT market and accelerating the growth of these instruments in India,' the IRA added.
Currently, there are five listed REITs in India: Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, Nexus Select Trust, and Knowledge Realty Trust. Shirish Godbole, CEO of Knowledge Realty Trust, highlighted the benefits of this move, stating that it will unlock deeper pools of capital for India's real estate sectors. 'This long-awaited move brings regulatory clarity, simplifies fund flows, and aligns India with global practices, making Real Estate far more attractive to both domestic and international investors,' Godbole added.
Ramesh Nair, MD and CEO of Mindspace REIT, shared his perspective, noting that this reform will enhance liquidity, broaden investor participation, and strengthen the depth of the Indian REIT market. 'The move, along with the expansion of the definition of strategic investors, will accelerate the next phase of growth for REITs and reinforce India's positioning as an attractive destination for institutional capital in yield-generating assets,' Nair observed.
Since the first REIT was listed in 2019, the total assets under management have crossed USD 2 billion, with expectations that this figure will reach USD 4 billion by 2030. Alok Aggarwal, MD & CEO of Brookfield India Real Estate Trust, stated that this regulatory development will bolster the growth trajectory of India's REIT market by enhancing market liquidity and deepening investor participation. 'We expect this move to facilitate inclusion of Indian REITs in benchmark indices, which should bring in more investors and deepen the attractiveness of this product to broader capital markets,' he added.
Amit Shetty, CEO of Embassy REIT, sees this as a catalyst to broaden investor participation, enhance liquidity, enable future index inclusion, and further strengthen REITs as a mainstream investment asset class. As per the SEBI regulation, REITs are required to distribute at least 90 per cent of their net distributable cash flows to unitholders. The IRA noted that four REITs have cumulatively distributed over Rs 24,300 crore to unitholders till Q1 FY26.
Last week, realtors' apex body CREDAI and property consultant Anarock released a report at an event in Singapore, highlighting that Indian REITs are generating an average yield of 6 per cent to 7.5 per cent for unitholders, better than many mature markets, including the US.
Frequently Asked Questions
What is the significance of SEBI classifying REITs as equity?
SEBI's decision to classify REITs as equity for investments by mutual funds is significant because it will enhance investor participation and deepen the REIT market in India. This move aligns with global best practices and will make real estate investments more attractive to both domestic and international investors.
How many REITs are currently listed in India?
There are currently five listed REITs in India: Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, Nexus Select Trust, and Knowledge Realty Trust.
What are the expected benefits of this decision?
The expected benefits include enhanced liquidity, broader investor participation, and the potential inclusion of Indian REITs in benchmark indices. This will make REITs a more attractive investment option and is expected to boost the growth of the real estate sector in India.
What is the average yield generated by Indian REITs?
Indian REITs are generating an average yield of 6 per cent to 7.5 per cent for unitholders, which is better than many mature markets, including the US.
What is the total assets under management for REITs in India as of now?
The total assets under management for REITs in India have crossed USD 2 billion, with expectations that this figure will reach USD 4 billion by 2030.
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