What is a REIT?
A Real Estate Investment Trust (REIT) is a type of company that lets investors pool their money to invest in a collection of income-producing real estate assets. REITs operate in a manner comparable to mutual funds, as they allow for individual investors to acquire ownership in commercial real estate portfolios that receive income from properties such as apartment complexes, hospitals, office buildings, timber land, warehouses, hotels, and shopping malls. In most cases, REITs operate by leasing space and passing on collected rent payments to its investors in the form of dividends.
In many jurisdictions across Asia Pacific, REITs distribute at least 90 percent of their earnings in the form of dividends as mandated by law or to enjoy tax benefits. (For an overview of REIT regulations by jurisdiction, check out our resource – REIT laws and taxes.)