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Summary: Your broker app shows a REIT yielding more than a fixed deposit. While the underlying arithmetic is correct, much of that payout is just your own capital coming back to you. Here is how to find the number that shows what you really earn.
Open any REIT on your broker app, and the yield reads 5 per cent, 6 per cent, sometimes higher. It looks better than a fixed deposit and steadier than a stock. The app computes it the standard way: the last 12 months of payouts, divided by the price. The arithmetic is correct.
The number still misleads you. It treats every rupee paid out as a return, and a large part of that money is your own capital coming back to you.
For those not familiar, a REIT, or real estate investment trust, owns rent-earning commercial property such as office parks and malls, and passes most of the income to unit holders.
A REIT payout works differently from a company dividend
When a company pays a dividend, it pays you out of its profit. The business earned the money and chose to share it with you.
A REIT payout bundles up to four things into a single figure: interest, dividends, rent and debt repayments. The first three are the real income that the buildings earned. The fourth is the REIT handing back the capital you invested. Counting that fourth part as yield is like a bank counting part of your own withdrawal as interest.
Suggested read: REIT or wrong?
Strip out the capital being returned, and the real income can be a fraction of the headline.
The same yield, very different earnings
How do the listed REITs stack against their actual yields vs the depicted
| REIT | Headline yield (per cent) | Real income yield (per cent) | Of every Rs 100 paid out, capital returned |
|---|---|---|---|
| Embassy | 5.9 | 1.8 | Rs 69 |
| Brookfield | 6.7 | 3.3 | Rs 50 |
| Mindspace | 5.2 | 2.8 | Rs 46 |
| Nexus | 5.8 | 5.1 | Rs 11 |
| Source: Quarterly distribution filings of each REIT, June 2025 to March 2026. Yields calculated based on prices as of 8 June 2026. Listed REITs with more than a year of listing are considered. | |||
Look at Embassy and Nexus. Both advertise close to 6 per cent yield. Embassy returns Rs 69 of every Rs 100 as capital, so its real income yield is 1.8 per cent, while Nexus returns just Rs 11, so its real income yield is 5.1 per cent. The headline is the same. The income one of them earns runs to almost three times that of the other.
Why this matters to you
Two things follow, and the headline yield hides both.
First, the income you lean on is smaller than it looks, and part of it is your own money. A REIT can return your capital to you only for so long. When the buildings earn less than the headline payout suggests, that gap has to close.
Second, every rupee of capital returned to you lowers your cost per unit. That trims your future capital gain. So a high headline payout today can cost you appreciation tomorrow.
How to read the real number
Treat the broker app's yield as a starting point, then check it yourself. Every REIT publishes a quarter-by-quarter breakdown of its payout. Pull it. Find the part labelled repayment of debt, or for Brookfield, repayment of shareholder loan. That is your capital coming back. Take it out.
Divide the income that remains, the interest, dividend and rent, by the price you paid. That figure, plus the rise in the unit price over the time you hold it, is what the REIT really gives you.
A high headline yield works as a fair starting signal. The cost comes from mistaking it for pure income and buying on that basis.
Also read: Real estate investment trusts: 'REIT' move or a risky one?
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