Top 5 REIT Mutual Funds to Watch in 2025
In 2025, Real Estate Investment Trusts (REITs) are emerging as a powerful tool 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.
ReitsMutual FundsReal EstateInvestmentSebiReal Estate NewsMay 28, 2025
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.
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.
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.
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.
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.
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.
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.
Frequently Asked Questions
What are REITs?
Real Estate Investment Trusts (REITs) are companies that own, operate, or finance income-generating real estate. They distribute a large portion of their income as dividends to shareholders, making them attractive for steady income.
Why are mutual funds investing in REITs?
Mutual funds are investing in REITs because they offer exposure to premium real estate assets, professional management, and the liquidity of stock market trading. REITs also provide consistent income through dividends.
What recent changes has SEBI made to REITs?
SEBI has proposed amendments to increase the individual issuer exposure limit for equity and hybrid mutual funds from 5% to 10% and the overall exposure cap from 10% to 20% for REITs and InvITs.
What is the top REIT in India?
Embassy Office Parks REIT is often considered the top REIT in India, with a Grade-A portfolio of over 42 million square feet across major cities and backed by marquee tenants like IBM, Microsoft, and Google.
What is the first retail-focused REIT in India?
Nexus Select Trust is the first retail-focused REIT in India, owning and operating around 10 million square feet of urban consumption centers (malls) across cities like Delhi, Bengaluru, Pune, and Navi Mumbai.
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