nottheaverageactuary

Actuarial news and views from Cape Town and beyond

REITs – A Collective Investment Scheme

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n preparation for part of today’s lecture topic, here is some clarification on where REITs fit in as an indirect investment.

I realise that this is a merger of Property and Collective Investment Schemes, but it made sense to explain REITs from a Collective Investment Scheme standpoint.

REITs (Real Estate Investment Trusts) are examples of investments trust companies as defined under Collective Investment Schemes. They are publicly traded, closed-ended schemes that allow investors to purchase shares of the company as a mechanism to invest indirectly in the property market. Listed property companies on the JSE have one of 3 statuses: REIT, Property Loan Stock or a Property Unit Trust. For more on Unit Trusts, see Izak’s post and for more on Property Loan Stock, see Wandile’s post.

So why REITs in South Africa? Basically, to boost South Africa’s property sector to international status and creating a uniform tax system that no longer confuses investors. It is a property market transformation from unit trusts and loan stock to investment trusts.

For more info on the introduction of REITs in SA, see

Analysis: REIT SA

For more info on the international status of SA’s property market with the introduction of REITs, see

REIT status puts SA property funds on global map

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