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Real Estate Investment Trust – Mini Overview

Real Estate Investment Trusts (REITs) function similarly to mutual funds, but with a focus on real estate assets. They pool funds from numerous investors to invest in income-generating properties or special purpose entities (SPVs) holding such properties. Traded on stock exchanges, REITs allow investors to buy and sell units akin to stocks. While aiming to deliver returns comparable to direct property investments, REITs offer benefits like risk diversification and tax advantages. However, they also come with drawbacks such as limited liquidity, high debt, modest growth potential, and tax obligations.

In response to the growing emphasis on sustainability, Green REITs have emerged, specializing in environmentally sustainable properties. These REITs engage in sustainable real estate investing activities by integrating eco-friendly components into their portfolios and promoting resource conservation and material efficiency.

Large REITs are implementing comprehensive sustainability policies covering existing buildings, new developments, and stakeholder engagement. These initiatives include investing in sustainable systems, adopting eco-friendly standards, educating tenants on energy-efficient practices, assessing environmental impact, and collaborating with investors and local communities.

The future looks promising for Green REITs, driven by increased awareness of environmental issues, growing demand for sustainable investments, technological advancements, collaborative partnerships, and supportive government regulations. Positioned to lead the transition to environmentally friendly building practices, Green REITs are poised to contribute to a greener and more sustainable future.

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Real Estate Investment Trust – Mini Overview

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