facebookPeople often group REITs and Business Trusts, what is your view? Is Business Trust a good substitute for REIT? - Seedly

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Anonymous

01 Oct 2020

Events

People often group REITs and Business Trusts, what is your view? Is Business Trust a good substitute for REIT?

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Rachelle Lye

01 Oct 2020

Digital Marketing at Fintech

The following is a response from the organisers of REITs Symposium 2020:

There are significant differences between REITs and BTs, with REITs being a highly regulated vehicle. BTs do not have the same requirements that investors typically look for in REITs. For e.g. REITs have a gearing limit of 50% while BTs do not. REITs are also required to distribute at last 90% of their income for tax transparency (no such requirement on BT).

Property trust is a type of Business Trust that have property assets. Some of these include Stapled Trusts which are stapled securities. Stapled securities are created when two securities with different legal structures are traded as one, retaining the rights or obligations attached to each of the individual security.

Among SGX’s 44 listed REITs and Property Trusts, 6 property trusts of which 5 are stapled trusts.

Visit SGX website for more info on REITs vs BTs.

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