How do I invest in real estate investment trust in South Africa?

To qualify as an REIT on the JSE in South Africa, the REIT must own at least R300m in property, debt must be below 60% of its gross asset value, at least 75% of the income must come from real estate activities, and a minimum of 75% of the income they receive must pass through to investors (90% in the US).

Are real estate investment trusts good investments?

REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns.

How do I become a REIT in South Africa?

An SA REIT must:

  1. Own at least R300 million of property.
  2. Keep its debt below 60% of its gross asset value.
  3. Earn 75% of its income from rental or from property owned or investment income from indirect property ownership.
  4. Have a committee to monitor risk.

How many REITs are there in South Africa?

The SA REIT Association represents SA’s listed REIT sector and its members comprise all 30-plus listed SA REITs with a market capitalisation of some R300 billion.

How is REIT income taxed in South Africa?

Special legislation allows REITs to pay out a qualifying dividend without incurring income tax within the company, which is then taxed in the hands of the investor as taxable income. This allows all earnings to flow through to investors without attracting income tax at the company level.

Is REIT income taxable?

The majority of REIT dividends are taxed as ordinary income up to the maximum rate of 37% (returning to 39.6% in 2026), plus a separate 3.8% surtax on investment income. Taxpayers may also generally deduct 20% of the combined qualified business income amount which includes Qualified REIT Dividends through Dec.

Where can I invest in REITs in South Africa?

Other top performing SA REITs to be included in the Top 100 Companies are Resilient Property Income Fund, Hyprop Investments, Capital Property Fund, SA Corporate Real Estate Fund, Redefine Properties, Growthpoint Properties, Vukile Property Fund, Octodec Investments, Emira Property Fund and Sycom Property Fund.

Are REITs a good investment in South Africa?

SA Real Estate Investment Trusts (REITs) made up a significant 11% of the Top 100 Companies over five years based on a compound annual growth rate, and the top spot went to a REIT for the first time. “Listed property continues to be the best performing asset class in South Africa.

How often do REITs pay dividends?

quarterly
Dividends paid on a monthly or quarterly basis. Real estate investment trusts (REITs) are one of the most popular options for investors seeking regular income. A real estate investment trusts must distribute more than 90% of its earnings each year in order to maintain its tax-free status.

How much do I need to invest in a REIT?

Private REITs Private REITs may have an investment minimum, and that typically runs from $1,000 to $25,000, according to NAREIT, the National Association of Real Estate Investment Trusts. Risk: Private REITs are often very illiquid, meaning it can be difficult to access your money when you need it.