What is REITs?

REITs (Real Estate Investment Trusts) is a kind of real estate trust fund, which raises funds by issuing stocks or beneficiary certificates, is managed by a special fund trustee, entrusts a special investment institution to manage real estate investment, and distributes the comprehensive investment income to investors in proportion.

REITs first appeared in the United States in the early 1960s, and were founded by the United States Congress, aiming at enabling small and medium-sized investors to participate in the real estate market at a low threshold, and gain the benefits brought by real estate market transactions, rents and appreciation.

Extended data:

For real estate trust funds listed in Hong Kong, the Hong Kong Securities Regulatory Commission has adopted strict requirements to ensure the stable and sustained growth of fund products. At first, REITs in Hong Kong can only invest in real estate properties with stable income sources, excluding projects under construction and projects that have not yet formed a stable cash flow.

20 14 After the liberalization of the Hong Kong Securities Regulatory Commission in August, the project under development can be REITs, but there are clear requirements for the products to be controlled within 10% of the total assets.

If it is a commercial real estate listed as a company, it is not necessary to have a SPV company. REITs have two requirements for product control. First, the property rights should be above 5 1%; The second is to have control (more than 2/3 of the voting rights in property management). The purpose is to have absolute dividend control or decision-making power over the company and ensure that investors can get stable dividends every year.

The Hong Kong Securities Regulatory Commission has no requirement on the loan ratio of real estate developers, but it has strict requirements on the loan ratio of REITs, and the loan ratio cannot exceed 45%, so it has excellent anti-risk ability.

Baidu Encyclopedia-Real Estate Trust and Investment Fund