Attractive Rental Yields of 7–10% and Capital Appreciation: Why Smart Investors Are Turning to REITs & AIFs in India
With commercial real estate delivering 7–10% rental yields and rising capital gains, Indian investors are increasingly diversifying into REITs and AIFs for liquidity, transparency, and institutional-grade returns.
The Fortune Realty Group
10/23/20254 min read

Attractive Rental Yields of 7–10% and Capital Appreciation: Why Smart Investors Are Turning to REITs & AIFs in India
With commercial real estate delivering 7–10% rental yields and rising capital gains, Indian investors are increasingly diversifying into REITs and AIFs for liquidity, transparency, and institutional-grade returns.
Table of Contents
For decades, investing in Indian real estate meant one thing — buying a home. But the investment landscape has evolved dramatically. Today’s smart investors are shifting towards commercial real estate, REITs (Real Estate Investment Trusts), and AIFs (Alternative Investment Funds) to secure higher returns, steady rental income, and portfolio diversification.
According to the Luxury Residential Outlook Report 2025 by India Sotheby’s International Realty, nearly 41% of HNIs and ultra-HNIs plan to invest in commercial real estate over the next 24 months, with 24% exploring AIFs to strengthen and diversify their wealth portfolios.
The New Era of Real Estate Investment in India
REITs in India have opened new doors for individuals who seek the benefits of owning premium real estate — without the operational hassles. Listed on stock exchanges, REITs pool investor funds into Grade A office spaces, malls, warehouses, and other income-generating properties, offering 7–10% rental yields along with capital appreciation.
The five listed REITs — Embassy Office Parks, Mindspace Business Parks, Brookfield India, Nexus Select, and Knowledge Realty Trust — collectively boast a market capitalization of nearly ₹1.5 lakh crore, having already distributed over ₹24,000 crore in income to investors.
Key Advantages of REIT Investments:
✅ Steady dividend income and unit price growth
✅ Liquidity, as units trade like stocks
✅ Transparency and regulation under SEBI
✅ Access to institutional-grade assets previously reserved for HNIs
This makes REITs an ideal option for investors seeking stable returns with flexibility and a hedge against inflation.
Why REITs Are Gaining Momentum Among Investors
For investors with a longer investment horizon, Alternative Investment Funds (AIFs) present a powerful opportunity. These funds combine income-generating real estate assets with high-growth projects to achieve strong IRRs (Internal Rate of Returns).
Debt Real Estate AIFs: Target 14–16% IRRs, offering better returns than traditional fixed-income instruments.
Equity Real Estate AIFs: Can yield 20%+ IRRs, depending on the project mix and risk management strategies.
AIFs are particularly attractive to high-net-worth individuals (HNIs) who prefer a professionally managed, diversified, and structured investment approach. By pooling funds across different geographies and asset classes — from office assets in Bengaluru to warehousing hubs in Pune — AIFs mitigate concentration risk while unlocking long-term value.
AIFs: Higher Returns with Structured Wealth Growth
India’s commercial property segment remains one of the strongest globally. In Q2 2025, the top eight cities recorded 21.4 million sq. ft. of gross office leasing, with a total of 42 million sq. ft. in the first half of 2025 — on track to break records by year-end.
The vacancy rate has dropped from 18.5% to 15.7%, reflecting strong demand from IT firms, startups, MNCs, and India-facing businesses. With such demand, commercial assets, office spaces, and pre-leased properties are fast becoming preferred investment vehicles for both individual and institutional investors.
The Strength of India’s Commercial Real Estate Market
For modern investors, balancing stability, liquidity, and capital growth is crucial. While residential real estate continues to serve as a long-term wealth anchor, REITs and AIFs offer a compelling way to achieve professional diversification and institutional-quality exposure without operational burdens.
A smart mix of REITs, AIFs, and select residential holdings ensures steady income, capital appreciation, and reduced volatility — the perfect combination in an uncertain economic environment.
Building a Balanced Investment Portfolio
Enhance your investment knowledge and explore more real estate insights from The Fortune Realty Group:
🏠 Top Features of This 3 BHK Near Sky Mansion – Smart Living in South Delhi
(Learn how modern apartments in South Delhi offer a blend of luxury and long-term appreciation.)🌿 Farm Land in Manesar for Sale – A Smart Investment for the Future
(Discover why investing in farmland near Gurugram is becoming a top trend among investors.)🏗️ Noida Builder Approved 26 Floors but Built 29 – The Real Estate Compliance Dilemma
(Understand the importance of legal verification and safe investments in today’s real estate market.)
Related Reads to Explore
Explore Other Prime Real Estate Opportunities in NCR
There are several verified and ready-to-move flats available in the region. At The Fortune Realty Group, we provide expert guidance and curated listings to help you find the perfect property.
You can explore:
Flats in Chattarpur & Vasant Kunj – Affordable options with excellent metro connectivity.
Farmland in Manesar – Ideal for investment and weekend retreats.
At The Fortune Realty Group, we help you find:
✅ Verified luxury builder floors with clear registry
✅ Prime locations like Gurugram, Manesar, Chattarpur, Vasant Kunj, Vasant Vihar, and more emerging hotspots
✅ Full support with home loans, legal formalities, and after-sales services
✅ Zero brokerage deals — so your investment goes directly into your dream home, not middlemen
With booming infrastructure, excellent connectivity, and rising demand, Gurugram, Manesar, Chattarpur, Vasant Kunj, and Vasant Vihar have become top choices in Delhi NCR for luxury living and high-return real estate investments.
Verified luxury builder floors with clear registry
How TFRG Makes Luxury Buying Stress-Free
Looking to Invest in South Delhi or Manesar?
Contact TFRG today for verified listings, legal due diligence, and best-in-class guidance across residential, commercial, and plotted developments.
The Fortune Realty Group
Experience hassle-free property deals with zero brokerage.
Contact Us
Inquiry
support@thefortunerealtygroup.com
+91-9990990317
© 2025. All rights reserved. Designed by PC Media House.
