JSE to welcome REITs regime
April 02, 2013
Johannesburg,
2nd April 2013 – From yesterday the 1st
April 2013 South Africa will implement a local Real Estate Investment Trust
(REIT) regime that will usher in a new era for the listed property sector. From
this date all property companies currently listed on the JSE either property
loan stocks or property unit trusts will convert to a REIT structure and any new
listings in this sector will have to comply with JSE REIT listing
requirements.
“The REIT structure is
in line with international best practice and having a globally understood
structure will make our listed property sector much more attractive to foreign
investors. The tax advantages of the new structure will also make the listed
property sector much more attractive to local investors,” says Patrycja Kula
Business Development Manager at the JSE. When South African listed property
funds convert to this system South Africa will be the 8th largest
REIT market. The REITs structure will bring about much needed tax and regulatory
changes
This change follows the
formal announcement of REIT tax legislation for South Africa, published on 25
October 2012 by National Treasury to introduce this internationally recognised
structure in South Africa. Under this new legislation, capital gains tax is no
longer payable on disposal of assets and without this tax activity in the sector
will increase.
To qualify as a REIT fund, companies need
to have:
• a minimum of R300 million in assets
• a total debt to asset
ratio of no more than 60%
• 75% income from property rentals
• a
distribution minimum of 75% of the distributable profits (dividends)
For investors, there is
certainty in that 75% of all net income is paid out and tax exposure is
determined only by the tax status of the recipient. International performance
comparisons will be easily made and the investor is protected within an
internationally defined and regulated industry.
FOR MEDIA ENQUIRIES:
Victoria Williams/Roz Thomas
Corporate
Communications Consultants
Tel: (011) 463 2198 Cell: 072 452 1772 / 082 925
8806
Email: victoria@corpcom.co.za / rozt@corpcom.co.za
On behalf of Patrycja Kula
Business
Development Manager
JSE Ltd
About JSE Limited
As South Africa’s only full service
securities exchange, the JSE connects buyers and sellers in four different
financial markets, namely equities, equity derivatives, commodity derivatives
and interest rate instruments. The JSE Ltd offers the investor a truly first
world trading environment, with world class technology, surveillance and
settlement in an emerging market context. It is amongst the top 20 largest
equities exchanges in terms of market.