Real Estate Investment Trust: REIT

Source: The Stock Exchange of Thailand

A REIT is a type of “trust” where a trustee is determined its true owner on behalf of its beneficiary and does not have a juristic person status. The trust settlor will eventually become the REIT Manager (RM) whom will offer trust units to the public. Once received capital from the sale of trust units, the RM will entrusted the following fund with the REIT’s designated trustee in order to establish the REIT. The trust deed will assign the REIT Manager to manage the REIT and the trustee to supervise the performance of the REIT Manager and administer the REIT in the best interest of the beneficiary.

Benefits of REIT

Property Owners

Owners may raise capital from real property that is already generating revenue and use that capital to invest and/or develop new projects.

Investors

  • Smaller investment is required than to directly invest in real property
  • Greater confidence in management under the management of real estate experts
  • Offer variety of ways to invest in real property

REIT

  • Able to invest in varied types of real property, including real property abroad
  • Able to use leverage to invest and/or develop real property for higher returns
  • Able to partially develop its own real property
  • Allow a company with expertise in managing real estate to become REIT Manager
  • Adheres to international standard

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