Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts (REITs) offer investors exposure to real estate properties and mortgages through a JSE-listed instrument. Property loan stock companies and property unit trusts, listed on the JSE have been converting into REIT structures since April 2013. ​

Who is this for?

Investors who want exposur​e to the property ​market without the large initial capital outlay.​​

Features

  • Must pay at least 75% of their taxable earnings available for distribution out to investors as dividends, giving investors certainty that net income will be paid out.
  • Earn their income from property leases, which means that they usually have a relatively stable income stream, which is adjusted upwards annually to keep pace with inflation.
  • Earn their income from commercial properties with long lease periods, which means that they usually have a relatively stable income stream, which is adjusted upwards annually to keep pace with inflation.
  • Are required to have a committee to monitor risk.
  • Investors may face some degree of risk because economic and social situations are unpredictable and may positively or negatively impact rental income and the price of REITs.
  • Foreign shareholders of SA REITs will be levied a dividend withholding tax from 1 January 2014. The current rate is 15%; or the applicable double tax agreement rate could apply.
  • Gives the property company enhanced tax efficiency as tax is payable by the end investor.​

How to get REITs

Open an account with an authorised JSE Equity member to buy or sell REITs. ​

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What are Property Entities?What are Property Entities?https://www.jse.co.za/content/JSEBrochureItems/PropertyEntities.pdfpdf