Real estate investment trust

A listed trust that owns completed, rent-producing property, usually offices, malls or warehouses, and passes most of its cash to unitholders. Under SEBI's rules an Indian REIT must keep at least 80% of its asset value in completed, income-producing property and distribute at least 90% of its net distributable cash flow.

A REIT distributing ₹240 crore a year with a market value of ₹3,700 crore yields 6.49%. That yield is the starting point for valuing one, compared with the government bond yield and with the growth the leases allow.

You judge the quality of the income from the lease data: occupancy, the weighted average lease expiry, the share of rent from the largest tenants, and how far current rents sit below market. Leverage matters too, because the distribution is what is left after interest.

Read the lease expiry table first.