Best REIT stocks in India with high dividend yield

Best REIT stocks in India: A real estate investment trust (REIT) is an investment trust that owns, operates, and finances real estate with the primary purpose of generating profits.

REITs manage a portfolio of high-value, high-rental real estate assets. REITs typically seek out small and large investors who want to invest money in real estate without having to purchase 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. REIT stocks are also attractive because of their strong dividends and long-term capital gains.

The Indian commercial real estate sector performed well during FY23. As the trend of returning to the office increases and tenant confidence increases, demand for quality space has increased.

SEBI, a market regulator, is also showing interest in REITs, deciding to stimulate investment through small and medium-sized REITs (SM REITs).

The SEBI Board of Directors has approved amendments to the Real Estate Investment Trust (REIT) Rules, 2014 to create a regulatory framework for promoting SM REITs with asset value above Rs. 50 crores for a minimum asset value of Rs. $500 million for existing REITs.

Commenting on the latest developments, SEBI Chairman Madhabi Puri Buch said: “The purpose of small and mid-cap real estate investment trusts is to help significantly expand the market for more retail investors to have fractional ownership of REIT units. She also said regulators were open to developing more such products.

In this article on top REIT stocks in India, we will look at the list of stocks and why investors benefit from investing.

Why Investors Profit from Investing in REITs

● diversification: Most REITs are traded on national stock exchanges and offer investors the opportunity to diversify their portfolios and invest beyond bonds and stocks.

● liquidity: Most REITs are traded on stock exchanges, giving investors the benefit of immediate liquidity.

● transparency: REIT is registered with Securities and Exchange Board of India (SEBI). Therefore, it is regulated by SEBI, which reduces the chances of fraud.

● high dividend yield: Certain dividend payments through rental income, the company must distribute more than 90% of rental income to unit holders in the form of dividends.

● Cheap Investment: Shares of REITs are relatively cheap and most REITs can be purchased for less than Rs. 300.

Best 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 unit was trading at Rs. 327 each.

Looking at the company’s financials, revenue grew 15.7% from Rs.3,052 crores to Rs.3,052 crores during FY22. In fiscal year 23, it is $353.1 billion. On the other hand, net profit decreased by 43.05% to 100 million won. 888.39 crores ~ Rs. 50.5 billion won during the same period.

The company also declared distribution of Rs. 2,057 crores or Rs. 21.7 per unit during FY23.

In terms of important ratios, the Weighted Average Lease Expiry (WALE), which is the average expiration period of all leases in the property, was recorded at 6.6 years, the occupancy rate was 86%, and the dividend yield was 6.89%. in FY23.

Embassy REIT, backed by Blackstone Group, is India’s first listed real estate investment trust. Embassy REIT owns and operates a 45.3 million square foot (“MSF”) portfolio of nine infrastructure office complexes and four urban office buildings in India’s leading office markets: Bengaluru, Mumbai, Pune and the National Capital Region. there is.

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 unit was trading at Rs. 316 each.

Looking at the company’s financial statements, sales increased by 6.42% to 190 million won. 1,201 crores in FY22 to Rs. In fiscal year 23, it is $127.8 billion. Additionally, net profit increased by 4% from 130 million won. 1,103 crores ~ Rs. 114.9 billion won during the same period.

The company also declared distribution of Rs. 1,132 crores or Rs. In FY23, it is 19.1 per unit.

According to the ratios that matter, the average expiry period of all leases within the Weighted Average Lease Expiry (WALE) properties as of FY23 was recorded at 7 years, with an occupancy rate of 88.30% and a dividend yield of 6.90%. .

The company’s portfolio consists of five integrated business parks and five luxury stand-alone offices, with a total leasable area of ​​32.3 million square feet, with 26.1 msf of finished area, 2.9 msf of area under construction and 3.3 msf of 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 unit was trading at Rs. 247.6 pieces.

Looking at the company’s financial status, sales increased by 36% to 120 million won. 877 billion during FY 21-22 and Rs 119.7 billion during FY 22-23. In comparison, net profit decreased by 46% to 50 billion won. $24.6 billion to $13.1 billion over the same period.

The company also declared distribution of Rs. 678 crores or Rs. 20.20 per unit in FY23.

As a percentage, the Weighted Average Lease Expiry (WALE), the average expiration of all leases in the property, was recorded at 6.8 years, with an occupancy rate of 88% and a dividend yield of 6.8%. in FY23.

The Company’s portfolio consists of 25.3 million square feet of gross leasable area, comprised of 20.7 million square feet of operating space, 0.7 million square feet of under construction, and 3.9 million square feet of future development potential.

Written by Vaibhav Patil

By utilizing the Trade Brains portal’s stock screener, stock heatmap, portfolio backtesting and stock comparison tools, investors have access to comprehensive tools to identify the best stocks, stay updated and informed with stock market news. invest.