A Rental REIT Scheme invests in commercial or residential Real Estate to generate rental income.
A Developmental REIT Scheme invests in real estate to develop it for Industrial, Commercial or Residential purpose through construction or refurbishment.
A Hybrid REIT scheme has both a portfolio of buildings for rent and a property for development.
What is REIT?
Real Estate Investment Trusts ‘REITs’ are closed end, listed funds created under REIT Regulations 2015.
REITs can be easily understood as a fund based trust that owns income-producing real estate, buys real estate-at market value, develops, manage/operates and sells real estate assets. Modeled after mutual funds, REITs typically pay out all of their taxable income as dividends to shareholders. In turn, shareholders pay the income taxes on those dividends. Their units are traded at the stock exchange and its portfolio is based on real estate assets. Regulatory framework for REITs was introduced by Securities & Exchange Commission of Pakistan ‘SECP’ in 2008 and subsequent it was revamped and replaced in 2015.