The Trustee is an independent party to ensure
that the interest of the shareholders is protected. They will ensure that the
REIT managers comply the applicable laws, maintain expected standards of the
REIT manager. The assets of the REIT also held by the trustee on behalf of the
unit holders.
A REIT Manager is appointed to manage the REIT.
Performance of the manager could be measured in different ways, for example by
the total assets size under management or the growth in the annual dividend
payout to shareholders. Managers would therefore seek out asset acquisition
opportunities or try to increase yield of the current properties. The REIT
manager is usually paid a base fee for their service and bonus fees should
their performance exceed expectations.
The Trustee typically holds properties owned by
the REIT in trust on behalf of the shareholders. An appointed Property Manager
will ensure that the premises are well maintained, kept clean and
infrastructures are good working condition. The property manager will be paid a
fee for their services.
Properties that are tenanted out will provide a
steady stream of income to the REIT. Income from the properties are first used
to pay the expenses of operating the REIT including the fees to the managers
and trustees. The remaining amount could either be kept in reserve in the REIT
and the rest distributed to shareholders. REIT listing regulations in Asia requires
REITs to distribute at least 90% of their taxable income to shareholders.
Finally, shareholders purchase units in the REIT as an indirect method of investing in the underlying properties. In return, shareholders receive a periodic distribution of dividends.
Finally, shareholders purchase units in the REIT as an indirect method of investing in the underlying properties. In return, shareholders receive a periodic distribution of dividends.
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