Unveiling the Indian REIT narrative-qualitative insights into retail investors’ perspectives
| Date | 14 May 2024 |
| Pages | 539-553 |
| DOI | https://doi.org/10.1108/JPIF-01-2024-0003 |
| Published date | 14 May 2024 |
| Author | G.R. Swathi,V.R. Uma |
Unveiling the Indian REIT
narrative-qualitative insights
into retail investors’perspectives
Swathi G.R. and V.R. Uma
Department of Commerce, Christ (Deemed to be University), Bengaluru, India
Abstract
Purpose –The present study delves into the causes of relatively lower retail participationin the Indian REIT
market. Specifically, it investigates investors’attitudes and perceptions towards REITs as a unique asset class.
This paper provides a comprehensive understanding of the perception and factors influencing Indian retail
investors’reluctance to participate in the REIT market.
Design/methodology/approach –Qualitative research was conducted through semi-structured interviews
to gather insights from non-investorsin REITs. The data were transcribed and analyzed using content analysis
techniques. Finally, coding techniques were used to identify broad study themes.
Findings –According to the study results, many retail investors are unfamiliar with REITs. Even among
those knowledgeable about REITs and with a favorable view, it is not commonly seen as a feasible investment
option due to its early stage, unattractive returns and limited number of REITs.
Practical implications–Developed countries have established REIT markets, while it is still in its infancy in
developing countries such as India. Financial advisors, fund houses and the mediashould focus on educating
investors to increase awareness.
Originality/value –The study is the first qualitative investigation into the perception of retail investors to
understand the reasons for lower retail engagement in the Indian REIT market.
Keywords REITs, Qualitative study, Challenges, Retail investors, Perspective, India
Paper type Research paper
1. Introduction
Real estate is typically seen as an alternative asset class in a portfolio. Real estate is a
supplementary investment to diversify a portfolio from traditional asset classes such as
bonds, stocks, and cash. The correlation between real estate and these other assets is
leveraged to achieve a more balanced investment portfolio (Baker and Chinloy, 2014). It is an
attractive asset class for both institutional and retail investors. Many investors choose to
invest indirectly in real estate through investment vehicles such as Real Estate Investment
Trusts (REITs) since investing directly in real estate can be expensive (Habbab and
Kampouridis, 2024). A REIT is a company investing in real estate assets to generate income.
The assets’ownership is divided into small portions, making it possible for retail investors to
acquire them. This ownership structure is advantageous to both investors and sponsors.
Retail investors can purchase ownership stakes in significant assets, while sponsors can
access many passive investors (Das and Thomas, 2016). Real estate investment trusts
(REITs) have become a popular way for many countries to invest in real estate assets. The
United States of America is a well-known country with significant experience managing
REITs. Several emerging economies have adopted REITs in recent years (Walia et al., 2023).
India, an emerging market, introduced REIT regulations in 2014, but the implementation
faced initial delays due to unclear laws, tax complexities, and transaction opacity (Savills,
2020). With regulatory clarity, a thriving commercial real estate sector, and saturation in
foreign markets, Indian REITs gained momentum. This resulted in the listing of Embassy
Office Park REIT in 2019, Mindspace REIT in 2020, Brookfield REIT in 2021, and Nexus
Select REIT in May 2023. According to the SEBI (n.d.), Indian REITs have mobilized funds
worth INR 5,905.35 crores between April 2023 and September 2023. Given the success of
Unveiling the
Indian REIT
539
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1463-578X.htm
Received 3 January 2024
Revised 11 March 2024
Accepted 10 April 2024
Journal of Property Investment &
Finance
Vol. 42 No. 6, 2024
pp. 539-553
© Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-01-2024-0003
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