InvestorQ : What qualifies as a real estate investment trust (REIT)?
priya Shah made post

What qualifies as a real estate investment trust (REIT)?

Pratik vyas answered.
2 years ago

A real estate investment trust is a company that gets investors to pool their money to invest in a collection of properties or other real estate assets.

In order to qualify as a REIT, a number of conditions need to be met. A few of these are:

- The REIT must have at least 100 shareholders

- At least 75% of assets must be invested in real estate, cash, or Treasuries

- 75% of gross income must be derived from real estate

- No five shareholders can own more than 50% of the shares.

- 90% of income generated must be distributed as dividend to the investors

- 80% of investment must be in properties that generate revenue

- Only 10% of the total investment must be in real estate under-construction

- The company must have an asset base of Rs 500 crore

- NAV of the REIT must be updated twice in each financial year