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REITs in India: Why Investors Preferred a Wait-and-Watch Approach

By PropertyGeld Editorial Team

Published on PropertyGeld: 6 Oct 2026

REITs in India: Why Investors Preferred a Wait-and-Watch Approach

REITs Gain Attention in India

Real Estate Investment Trusts (REITs) were emerging as an important investment option in India's property market. However, despite considerable interest from the real estate industry, many individual investors remained cautious about investing in them.

A major reason was limited awareness about how REITs worked, their potential returns and the risks associated with market-linked investments.

Investors Remain Uncertain About Returns

The survey found that 54% of respondents felt that REITs were receiving more attention because of market hype than because of clearly attractive returns.

At the same time, 78% said they would consider REITs more seriously if they could provide double-digit returns.

This showed that investors were comparing REITs with other investment products and wanted sufficient returns to compensate for the additional market risk.

Awareness Was Still Limited

Around 62% of respondents believed it was still too early for REITs to become a mainstream investment option in India.

Only about 32% said they had a clear understanding of the REIT investment model.

Awareness about the taxation aspects was also limited. Only 42% of respondents said they understood areas such as capital gains tax, minimum alternate tax and dividend distribution tax.

Minimum Investment Was Another Concern

The minimum investment requirement was another issue for retail investors.

Many people were accustomed to investing smaller amounts in shares and other financial products. Therefore, a considerably higher entry requirement for REITs was seen as a barrier.

The survey found that 82% of respondents questioned why REIT investments should require a higher initial amount compared with stocks.

Why Investors Preferred to Wait

A large proportion of respondents believed that it was better to observe the performance of REITs before investing.

Around 88% questioned whether REITs could generate significantly better returns than relatively safer investment products.

This uncertainty encouraged investors to adopt a wait-and-watch strategy rather than become early investors in a relatively new investment product.

REITs Could Take Time to Become Mainstream

The survey indicated that investors expected REITs to need considerable time before becoming a widely trusted investment vehicle.

Around 66% believed it could take seven to 10 years for REITs to establish themselves as a reliable investment option in India.

Respondents also felt that greater investor education was necessary before REITs could attract a much larger retail audience.

Need for Greater Investor Awareness

One of the major suggestions from respondents was the need for an industry-wide awareness campaign.

Around 64% believed companies launching REITs should collectively educate investors about the product, its risks, taxation and potential benefits.

Better awareness could help investors understand how REITs differ from directly purchasing physical property.

Embassy-Blackstone REIT Gets Attention

At the time, the proposed Embassy-Blackstone REIT was expected to become an important milestone for India's real estate investment market.

Its large office portfolio and strong institutional backing were seen as factors that could help establish confidence in India's emerging REIT ecosystem.

The analysis suggested that the performance of the first major REIT listings would influence how quickly other developers and investors entered the market.

REITs and India's Commercial Real Estate Market

REITs were expected to create a new connection between commercial real estate and financial-market investors.

Instead of purchasing an entire commercial property, investors could gain exposure to income-generating real estate through a listed investment structure.

This could potentially make commercial real estate accessible to a broader investment base.

Conclusion

REITs were considered an important development for India's real estate industry, but retail investors in 2018 remained cautious.

The main concerns included limited awareness, uncertainty about returns, taxation, investment requirements and market risk.

The survey showed that investors wanted to see how REITs performed before committing their money. As a result, the industry faced the challenge of building investor confidence and explaining the product more effectively.

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