The possible impact of the proposed South African reit structure on the listed property sector

A Real Estate Investment Trust is simply a body that utilises collective funds tomanage and purchase income producing properties. The terminology is widelyrecognised internationally, although in South Africa a structure exists which is not toodissimilar to the Real Estate Investment Trust, the listed property sector in SouthAfrica is undergoing a huge shift as a result of the more distinguished Real EstateInvestment Trust structure being proposed by the National Treasury. This reportfocuses on establishing whether the proposed structure is expected to have an impacton the listed property sector in South Africa. The hypothesis is tested through the useof literature and research pieces stemming from countries where the structure iscurrently in existence. The proposed South African Real Estate Investment Truststructure is studied critically to determine the key issues that will impact onperformance of a listed fund, and is also compared to a selection of existing structuresaround the world. The key findings were conclusive in that the Real Estate InvestmentTrust is expected to have a positive impact on the listed property sector.