What are REITs and how do they work?

REITs, or Real Estate Investment Trusts, are investment vehicles that invest in incomegenerating real estate assets. These assets can include office buildings, shopping centers, hotels, apartment buildings, and other commercial properties.

REITs work by pooling together capital from individual investors and using that capital to purchase and manage real estate properties. The income generated by these properties, in the form of rent or lease payments, is then distributed to the REIT investors in the form of dividends.

REITs offer investors the opportunity to invest in real estate without having to directly purchase, manage, or finance properties themselves. They also offer the potential for regular income and longterm capital appreciation.

In India, REITs are regulated by the Securities and Exchange Board of India (SEBI) and are required to distribute at least 90% of their taxable income to investors as dividends. They are traded on stock exchanges like equities and provide investors with a liquid way to invest in real estate.