A REIT is a regulated investment vehicle that enables persons to collectively contribute money or money’s worth as consideration for the acquisition of rights or interests in a trust that is divided into units with the intention of earning profits or income from real estate as beneficiaries of the trust.
a) Income Real Estate Investment Trust (I-REIT)
This is a real estate investment scheme which owns and manages income generating real estate for the benefit of its investors therefore providing both liquidity and a stable income stream. Distributions to investors are underpinned by commercial leases. This means that income returns are generally predictable.
b) Development Real Estate Investment Trust (D-REIT)
A Development Real Estate Investment Trust (D-REIT) is a development and construction real estate trust involved in the development or construction projects for housing, commercial and other real estate assets.
A REIT can be issued by a Property Manager, Owner, Developer or their representative. A REIT issuer could also be the person who is nominated to be the promoter of the REIT, in the application to the CMA, for the authorization of the REIT.
REITS are for investors who want exposure to the property market without the large initial outlay of capital.