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REIT
• Real Estate Investment Trust
• Investment in immoveable properties
• Real Properties
• Offer stability because the properties
owned should continue to generate
rental income.
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Why REIT
• Minimum Investment
• Low risk
• Income stability
• Diversification
• Both Stock and Real Estate
• Liquidity-as traded security
• Tax advantages
• Quality real estates
• Expert Management
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What is REIT?
• A corporation, business trust or
association primarily developed to own or
finance real estate
• There are board of directors-trustee
• REIT must not engage in short-term
property holdings that are sold for quick
profits.
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Mortgage REITs
• Mortgage REITs do not own real estate
but rather make loans that enable others
to buy real estate
• Invest money in short term or long term
mortgages and derive income from fees
and interests on the loans
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Equity REITs
• Invest directly in real estate assets
• The goal is to invest primarily in income-
producing properties
• Equity REITs acquire properties that will
increase in value and whose rental stream will
increase
• Shareholders will receive dividends from rents
and sale of properties, benefits from rental
income and from appreciation in the value of
properties.
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Hybrid REITs
• Combination of both equity and mortgage
REITs
• Invest in both real estate and mortgage
interest.
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Legal And Regulatory
Framework
• Securities Commission Act 1993
• Guidelines on Real Estate Investment
Trusts
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Parties in REIT
1) Management Company-subsidiary of financial
companies, or property development company
2) Trustee- a trust company registered under the
TCA 1949 or pursuant to PTCA 1995
3) Purchasers of the shares/Beneficiaries
- Passive investors- may choose which company
to invest but will not be able to dictate types of
shares to be bought-has no say.
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ISLAMIC REAL ESTATE
INVESTMENT
• Interest
• Types of properties
• Halal/haram business
• Board of Syaria’ Panel
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• Roxburgh J in Re a Solocitor [1952] Ch
328, 332 said “ as the principles of
equity permeate the complications of
modern life, the nature and variety of
trust ever grow”
• Moral of the dicta: Trust is growing and
may defeat the orthodox definition of
trust
