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REIT Returns: Income Plus Repricing Upside
- REITs deliver total returns via regular distributions plus capital appreciation from rent escalations and lease re-pricing.
- India-specific levers (escalations, development, acquisitions) offer material upside to unit holders.
Use Payout Policy To Judge Income Reliability
- Expect distributions; SEBI mandates 90% free cash flow payout but some REITs pay 100% and more frequently.
- Use payout frequency and coverage to compare income reliability across REITs.
REIT Distributions Have Tax Advantages
- REIT distributions comprise dividend, loan amortization, and interest; only the interest portion is taxable to investors.
- Maximizing dividend and amortization components improves after-tax returns for retail investors.