Deep Dive Into REITs

JC Parets
February 11, 2022

In a market that's going sideways, it can become quite frustrating to figure out what the trend is. More often than not, there are certain sectors that perform well and certain sectors that don't. But it's also important to identify other avenues of investment that could generate good returns over a period of time.

Today we're exploring one such theme in the form of REITs. Read on, to learn more.

Going by that theme, we are focusing on areas of the market which continue to maintain strength. The latest to grab our attention is Real Estate Investment Trusts. If you're someone who's looking for some real estate exposure in the form of REITs, the this might interets you.

A Real Estate Investment Trust (REIT) owns the income-generating real estate assets portfolio. It generates profit in the form of dividends & capital appreciation. It is similar to the functioning of a Mutual fund, whereby you get exposure towards a particular investment vehicle through collective pooling of money.

India currently has three listed REIT stocks that can be traded through the stock exchange.

Our custom REIT index made a new all-time high in an environment where major sectoral indices are struggling below overhead supply zones.

Let’s look at the constituents to get a clear idea about the levels to be followed.

Brookfield closed at a new weekly high with strong relative strength against the Nifty 500. Shared below is the daily chart. As long as prices are above 300, the bias remains to the upside. A breakout above 320 would propel the next move here with a target close to 390.

Mindspace Business Park has broken out of a multi-year base while maintaining its strength against the Nifty 500. We are also seeign a clear follow-through in prices post the breakout. If prices remain above 340, we want to be long with an upside price target of 381. This is the kind of leadership we want to invest in.

And last but not the least, here is India's first listed REIT- Embassy Office Parks. The price is still stuck right at its resistance. So this one is one to keep an eye on. Only a breakout above 390 would bring the bullish thesis into play. In that case the target to track would be 455.

This was a round-up of the REITs available in India. It is important to understand the functioning as well as the pros and cons of investing in REITs. We recommend that you discuss this with your financial planner before jumping into it.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

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