Real Estate Investment Trusts (REITs) are companies that own, operate, or finance income-generating real estate. Think of them like mutual funds, but instead of investing in stocks and bonds, REITs invest in real estate assets such as shopping malls, office buildings, apartment complexes, hospitals, and warehouses. REITs pool money from multiple investors to acquire and manage these properties. They generate income primarily through rental revenue from tenants.

Key features are as below

• Since it is mandated to distribute at least 90% of their net distributable cash flow to investors in the form of dividends, REITs become an attractive investment option for those seeking a steady stream of passive income.
• REITs make investing in high-value real estate accessible to individual investors with smaller capital amounts,
• REITs offer diversification by investing in a portfolio of real estate assets across different sectors and locations, reducing risks associated with individual property ownership.
• Being traded on stock exchanges, REIT units offer easier buying and selling compared to physical real estate.
• REITs are managed by experienced real estate professionals, removing the hassles of property ownership and management for investors.
• The value of the underlying properties owned by the REITs can appreciate over time, offering potential for capital gains.
• As listed entities, REIT units are subject to market fluctuations and real estate market risks, impacting their prices

REITs offer a unique way to invest in real estate, particularly for those seeking passive income and diversification without the burden of direct property ownership.