We Analyzed Indias Top Reits And Invits Heres The Verdict

TITLE: We Analyzed India’s Top REITs & InvITs. Here’s the verdict CHANNEL: ET Money DATE: 2026-06-20 ---TRANSCRIPT--- Amid the ongoing market gloom, REITs and InvITs have quietly found a big place in mutual fund portfolios. From about 20,000 crores 1 year ago, the [music] exposure of mutual funds to REITs and InvITs have gone up to over 31,000 crores, a massive rise of 56%. Parag Parikh Flexi Cap Fund, whose holdings are widely tracked for promising investment ideas, has significantly raised its stake in Brookfield and Embassy REITs over the last 1 year. What’s more, REITs have been accorded equity status in January 1st, 2026 [music] and in its February 2026 reclassification, SEBI allowed investments in InvITs by a variety of funds. Overall, there appears to be a lot going on for this asset class. Amid [music] this, which are the most promising REITs and InvITs? We’ll find out in this video. Hello and welcome to ET Money’s YouTube channel. We had last discussed REITs and InvITs over 2 years ago. In this video, we’ll see how the REIT and InvIT landscape has changed since then. We will also analyze the eligible REITs and InvITs so that you can pick the best ones for your portfolio. Now, if you want to know more about this asset class, we have a full playlist dedicated to this on this channel. I’ve included the link in the description so you can watch this later. All right. Let’s start by taking a look at the available options in this space. But before we continue ahead, a quick update. While finding a good REIT or InvIT for yourself might get a tricky, thankfully that is not the case for mutual funds. Because we have built something called as ET Money Select. It’s a personalized short list of funds that stand out from over 2,000 plus mutual funds, not just on returns, but on how consistently they deliver and how well they protect when markets fall. The list is personalized to your risk appetite and gives you fund for long, medium and short-term horizon. And for every fund, you get a simple note explaining how it invests and what drives its performance. Plus, an an if the fund starts to dip or a better alternative is found. So, do check it out. All right. On your screen are the available REITs and InvITs along with their ages. As of now, there are six REITs and eight InvITs available. Among REITs, Embassy is the oldest REIT with an age of 7 years since its listing. It is followed by Mindspace and Brookfield, which are about 6 and 5 years old. IRB InvIT and IndiGrid are the oldest InvITs with the age of about 9 years. Now, among the youngest REITs in terms of their listings are Nexus Select City and Bagmane. Both have yet to complete a year. The youngest InvITs are CityS, Rajmarg, and Anantum. These have yet to complete a year. Capital Infra and Indis Infra are at least a year old. Now, for our analysis, we will consider those REITs and InvITs that have completed at least 3 years since listing. Doing so will ensure we have sufficient information about them. This leaves us with four REITs and three InvITs. Now, to analyze them, we will use the same framework that we used in our previous video. We’ll first take a look at their portfolios, then we’ll analyze their financials, and after that, we will check their distributions, and finally, we’ll assess their valuations. But, do note that none of the REITs and InvITs discussed in this video are our recommendations. We are just analyzing them and presenting the facts to you. Whether or not you should invest in any is something you will need to decide on your own after doing due diligence. One more thing, the data that we are going to present here has been painstakingly collected from annual reports, earnings presentations, valuation reports, and company websites. Moreover, since REITs and InvITs are a distinct asset class, the usual analytical metrics are not valid for them. And that’s what makes this video a prized asset, for you won’t possibly find all the data we are going to discuss anywhere else. All right. On your screen are the portfolios of the four shortlisted REITs. In terms of size, Embassy is the biggest REIT of all with a leasable area of 53 million square feet. Embassy owns 10 office parks and four city center buildings. It also has hotel assets and a solar park as well. Mind Space and Brookfield have office assets with leasable area of 42 and 37 million square feet respectively. Mind Space also runs data centers. Nexus itself a retail REIT. It has 19 urban consumption centers and is present across 15 cities. Apart from that, it also has hotel assets and office assets. The office focus REITs, Embassy, Mind Space and Brookfield are present in employment hubs like Bengaluru, Pune, Mumbai, Delhi, Gurgaon, etc. Next, take a look at the portfolio of the three shortlisted InvITs. Of the three InvITs, IRB has highway assets while Indigrid and PGInVITs have transmission assets. IRB’s 10 highway assets have an enterprise value of about 18,300 crores. On the other hand, Indigrid’s transmission assets have an enterprise value of about 34,000 crores and PGInVITs 8,700 crores. Now, this portfolio overview tells us about the nature, size and the kind of assets various shortlisted REITs and InvITs hold. Next, let’s check the historical growth in the assets. For REITs, we have used the leasable area as the growth metric. Over the last four years, Embassy’s leasable area has risen from 43 million square feet to 53 million square feet. That’s a growth of about 5% per annum. Mind Space’s leasable area has risen by about 9% per annum from 32 million square feet to 44 million square feet. Brookfield’s has highest growth rate of 19% per annum, which suggests aggressive expansion. Finally, Nexus has grown by 4% per annum over the last two years. But, do note that since Nexus is a retail focused REIT, its numbers are not directly comparable with the other three REITs. Now, what about the three InvITs? If you check the growth in the enterprise value of their assets, IRB stands out at 26% per annum, followed by IndiGrid and PG InvIT. IRB actually acquired four new assets between FY25 and FY26, due to which its enterprise value witnessed a sharp jump. IndiGrid has been consistently acquiring new assets, as seen in the consistent rise in its enterprise value over the time from about 21,000 crores to about 34,000 crores. However, PG InvIT’s growth is negative, which suggests no new asset addition. From about 10,200 crores in FY22, its enterprise value has come down to 8,700 crores in FY26. Now, in case of REIT, there are two important portfolio metrics. First is occupancy rate, and the second is the weighted average lease expiry. The occupancy rate tells us how much of the leasable area is occupied by tenants. Naturally, the higher it is, the better. Among the four REITs, Nexus has the best occupancy rate of over 97%, but do remember it’s a retail-focused REIT. Among office-focused REITs, Mindspace has the highest five-year average of 90%. In FY26 as well, Mindspace is ahead of two at 94%. Next, weighted average lease expiry or WALY tells us the average time remaining until all leases in a portfolio expire. The longer it is, the better. Among office-focused REITs, Embassy has the best average five-year WALY of 7.5 years. In FY26 as well, at 8.5 years, it’s at the top. Nexus has a WALY of 4.8, which may look low, but for a retail-focused REIT, it’s fine. All right, in the next section, let’s take a look at some key financial metrics of seven REITs and InvITs. But before that, if you aren’t already a subscriber of our channel, please do subscribe, and don’t forget to press the bell icon so you never miss a video from us. All right, in this section, we will check three metrics in case of REITs. First is growth in net operating income or NOI, net debt to gross asset value or GAV, and growth in net distribution cash flow or NDCF. NOI is a profitability metric, net debt to GAV is a safety metric, and NDCF is a cash flow metric. First is net operating income or NOI. It is revenue minus operating expenses. In the case of REITs, it’s better to check NOI as revenue can include pass-through reimbursements like taxes, insurance, etc., and can be artificially high. Now, in terms of NOI growth, Brookfield is at the forefront given its aggressive expansion. Mindspace has seen its NOI grow at 16% per annum, which is quite good. Even Nexus’ NOI has grown at a similar rate. The next metric is net debt to gross asset value, which is a metric of indebtedness. This metric is important as REITs often resort to debt to fund their expansions. A ratio of 25 to 35% is considered okay. All the four REITs have broadly remained in this zone historically and on average. Then comes NDCF, which is a crucial metric for a REIT or an InvIT. The primary goal of an investor for investing in a REIT or an InvIT is distribution. This distribution depends on the NDCF. By mandate, REITs and InvITs must distribute at least 90% of their NDCF, so tracking growth in it can tell you if the REIT or InvIT is generating enough cash flows for a rise in distribution over time. Now, among the four REITs, Brookfield has increased its NDCF by a rate of 21% per annum over the last 4 years. Nexus has done well, too, at 13% per annum. Embassy has proved to be the slowest at just 4% rise in NDCF. In case of InvITs, the corresponding measures are revenue growth, net debt to AUM, and NDCF growth. Let’s first see the historical revenues and revenue growth of three shortlisted InvITs. IndiGrid has reported the highest rise in revenue of 11% per annum. Embassy InvIT has registered the least growth of 1.1% per annum. This should not be surprising as Embassy InvIT hasn’t grown its assets over years, and hence its revenue has also stagnated. InGrid’s aggressive expansion has benefited the company via its higher revenues over time. Next is the safety metric, which is net debt to AUM. Here, InGrid is the most indebted with an average net debt to AUM of 59%. This is on the higher side as per InVit standards. On the other hand is PGInVit, which is ultra-conservative. Its average net debt to AUM is just 3.5%. IRB’s net debt to AUM is reasonable at an average of 31%, though it has spiked in FY26 to 43% amid the acquisition of new assets. The reasonable debt can aid expansion as indeed desirable in the infrastructure-related companies. However, one should be cautious of too high a debt, which can cause trouble. Interestingly, the three InVits showcase the three cases very well. Very low debt of PGInVit, high debt of InGrid, and a reasonable debt of IRBInVit. Finally, let’s check the NDCF and its growth. InGrid has the highest NDCF growth rate of 10% per annum, suggesting its expansion strategy has resulted in higher cash flows for its unit holders. PGInVit’s NDCF is almost flat, which is understandable given its low growth, low risk positioning. Finally, IRB lies in the middle. After flattish NDCF until FY25, its FY26 NDCF has registered a spike of 47% year-on-year due to the acquisition of new assets. All right. In the next section, let’s look at the most crucial aspect for an investor standpoint, distributions. REITs and InVits are required by regulation to distribute at least 90% of their NDCF. The payouts are often quarterly, and these act as regular income streams for investors. It’s desirable that distributions also rise over time as a REIT or InVit increases its NDCF. That would in turn mean higher income for unit holders over time. Let’s take a look at the historical distributions per unit. But before that, it’s important to note that that one cannot compare the per unit value of distribution across REITs and InVits and conclude that one is better than the other. That’s because the unit prices vary across REITs and InvITs. All right, but what we are interested here is the growth in the payouts. At 7% per annum, the best growth in payouts is that of Mindspace REITs. It is followed by Embassy InvIT and Nexus REIT, though the latter’s history is quite limited. IRB’s payout has shrunk by 7.5% per annum over the last 4 years, and Brookfield’s by about 1% per annum. PG InvIT’s payout is the same over the last four FYs. So, its growth has all but stalled. Now, it’s worthwhile to remember that for REIT and InvIT investors, gains can also originate from the appreciation of the unit value of the REIT or InvIT as they are actively traded. Also noteworthy is that the same payout can mean different yields for different investors depending on the price at which you buy a REIT or an InvIT. The lower the price at which you buy, the greater the yield, and vice versa. And this makes checking valuations absolutely important. And let’s discuss them in the next section.

[music] Assessing REIT or InvIT valuations is rather straightforward. Just like an ETF, you can compare the current NAV of REIT or InvIT with their trading price. If the price is higher than the NAV, it may mean that the REIT or InvIT is trading at a premium, and vice versa. But, there is one problem in doing so. REIT or InvIT NAVs are not disclosed daily, so you will have to rely on the latest available value and make some educated adjustments. Now, as for the latest data, only IndiGrid and PG InvIT are at a premium to their NAVs. The other REITs and InvITs are at a discount ranging from 6% to 16%. Notably, both InvITs at a premium are related to the power sector. Now, valuations are influenced more by the future prospects rather than the trailing data. So, it’s likely that the market is pricing in difficult times for office realty and also roads infra. On the other hand, the power sector may be looking more promising in the future, and hence the higher valuations. Whatever the case may be, from a pure data perspective, the four REITs and InvITs are available at a bargain. But, do your own research before investing in any of them. All right. Let’s summarize the key findings of this video in the concluding section. REITs and InvITs are a distinct asset class and can be a great avenue to diversify your portfolio. When you invest in REITs, you are in essence investing in real estate and benefiting from periodic rent-like payouts. When you bet on InvITs, you’re investing in core infrastructure and benefiting from periodic payments. This makes REITs and InvITs a promising option to generate income with reasonable predictability. The available REIT and InvIT options are growing and there are 14 options at present. In this video, we analyze a number of metrics related to seven short-listed REITs and InvITs. A quick summary is on your screen for the main metrics. However, do go beyond the summary and understand the nuances as well before you make your final call. Do let us know in the comment section which REIT or InvIT you will go for. And with this, we’ve come to this end of this video. If you found this video useful, please share it with your friends and family. I’ll be back soon with another video. Till then, take care. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.