TYPES OF SA REITs:
All SA REITs own income-producing property. Prior to SA REIT legislation there were historically two forms of listed property investment entities in South Africa: property loan stocks companies (PLSs) and property unit trusts (PUTs). Both were able to adopt the REIT regulatory framework set out by the Johannesburg Stock Exchange (JSE).
The structure is flexible and allows SA REITs to be managed internally or externally, and caters for different equity structures that may exist, such as A- and B- linked units that have different rights that existed in some property loan stock companies.
- In a Company REIT shareholders are active participants. They enjoy the full protection of the Companies Act and Takeovers Regulations Panel. They can vote on specific issues in a general meeting. Shareholders vote for the company to be a REIT
- The company has the REIT structure recorded in its memorandum of incorporation
- Company directors are responsible for its ongoing compliance with the JSE's listing requirements and the Companies Act
- Companies can have external or internal management and/or property
- An existing PUT will become a SA REIT upon application to the JSE and after providing evidence of its compliance with the JSE Listing Requirements and that it is registered with the Registrar of Collective
- Investors' interests are protected by a trust deed and the trustee, whose role it is to ensure compliance with the Collective Investment Schemes Control Act and to safeguard investors' assets
- The Trust REIT needs to meet all JSE listing requirements but are not subject to the Takeovers Regulations
- Trustees report to the Registrar and must meet all the requirements of the Collective Investment Schemes Control Act
- Must have an external asset and property manager in terms of the Collective
Investment Schemes Control Act
SA REITs invest in all types of property:
Most SA REITs own several kind of commercial properties like shopping centres, office buildings, factories, warehouses, hotels, hospitals and even, to a lesser extent, residential properties, in cities and towns across the country. Some even invest in properties in other countries.