REIT

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Amanah Pelaburan Hartanah
Real Investment Estate Trust (REIT)

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REIT

  1. 1. 06/14/13 1REAL ESTATE INVESTMENTTRUST (REIT)
  2. 2. 06/14/13 2REIT• Real Estate Investment Trust• Investment in immoveable properties• Real Properties• Offer stability because the propertiesowned should continue to generaterental income.
  3. 3. 06/14/13 3Why REIT• Minimum Investment• Low risk• Income stability• Diversification• Both Stock and Real Estate• Liquidity-as traded security• Tax advantages• Quality real estates• Expert Management
  4. 4. 06/14/13 4What is REIT?• A corporation, business trust orassociation primarily developed to own orfinance real estate• There are board of directors-trustee• REIT must not engage in short-termproperty holdings that are sold for quickprofits.
  5. 5. 06/14/13 5TYPES OF REITEQUITYREITHYBRIDREITMORTGAGEREIT
  6. 6. 06/14/13 6Mortgage REITs• Mortgage REITs do not own real estatebut rather make loans that enable othersto buy real estate• Invest money in short term or long termmortgages and derive income from feesand interests on the loans
  7. 7. 06/14/13 7Equity REITs• Invest directly in real estate assets• The goal is to invest primarily in income-producing properties• Equity REITs acquire properties that willincrease in value and whose rental stream willincrease• Shareholders will receive dividends from rentsand sale of properties, benefits from rentalincome and from appreciation in the value ofproperties.
  8. 8. 06/14/13 8Hybrid REITs• Combination of both equity and mortgageREITs• Invest in both real estate and mortgageinterest.
  9. 9. 06/14/13 9Legal And RegulatoryFramework• Securities Commission Act 1993• Guidelines on Real Estate InvestmentTrusts
  10. 10. 06/14/13 10Parties in REIT1) Management Company-subsidiary of financialcompanies, or property development company2) Trustee- a trust company registered under theTCA 1949 or pursuant to PTCA 19953) Purchasers of the shares/Beneficiaries- Passive investors- may choose which companyto invest but will not be able to dictate types ofshares to be bought-has no say.
  11. 11. 06/14/13 11ISLAMIC REAL ESTATEINVESTMENT• Interest• Types of properties• Halal/haram business• Board of Syaria’ Panel
  12. 12. 06/14/13 12• Roxburgh J in Re a Solocitor [1952] Ch328, 332 said “ as the principles ofequity permeate the complications ofmodern life, the nature and variety oftrust ever grow”• Moral of the dicta: Trust is growing andmay defeat the orthodox definition oftrust

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