Anyone can invest in a SA REIT entity. Investment in the SA REIT asset class is typically suited for investors looking for stable growing income returns over the long term. It is a powerful diversification tool in a diversified investment portfolio and is suitable for local and international:
Investing in a SA REIT may be easier than you think. The JSE says that the minimum investment in a SA REIT is one share. Depending on the SA REIT, this could then be below R100. Investments can be made directly in a SA REIT via a securities account (online or using a stockbroker), collective investment scheme (Unit Trust) or Retirement Annuity that invests in SA REITs. The SA REIT Index can also be your investment to obtain exposure to the whole sector.
Shareholders of a SA REIT company won’t pay Securities Transfer Tax (STT) on buying or selling SA REIT shares. South African investors will receive gross distributions from a SA REIT entity, without the 15% dividends tax being levied against the distribution. But investors will have to pay tax on the distributions at their applicable marginal income tax rate when they include it in their taxable income. Foreign shareholders of SA REITs will be levied a dividend withholding tax from 1 January 2014 – the current rate is 15% or the applicable double tax agreement rate could apply.
While SA REITs only became a reality on 1 May 2013, the listed property asset class has a rich history in South Africa. The sector dates back to 1969 and was established to allow individual and institutional investors to invest in a diversified portfolio of investment grade properties on the same basis as if they had bought the properties directly.