Real estate investment trust. Listed company that invests solely in property. Facilitates indirect investment in properties for investors through the purchase of shares. The majority of its profit is distributed and taxation occurs at investor level only (tax transparency).

Characteristics of a REIT stock corporation

A property company must satisfy several criteria in order to receive and maintain REIT stock corporation status.

Restriction of business purpose

  • Acquiring, holding, managing and selling properties: ownership or easement rights in land and land rights
  • No German “pre-existing residential properties” (= properties predominantly used for residential purposes and built before 1 January 2007 --> according to share of area)
  • Properties in Germany can be held directly or through property partnerships
  • Properties outside Germany can be held directly or through international property companies (wholly-owned subsidiary corporations of the REIT stock corporation)
  • Sideline property sector activities for third parties only by REIT service companies
  • (wholly-owned subsidiary corporations of the REIT stock corporation) -> technical and commercial management
  • Brokerage, project management, project development
  • Investment in a general partner GmbH of property partnerships possible, if only in a protection capacity

Restriction on the composition of assets, revenue and income

  • At least 75% of the assets in the consolidated financial statements must be immovable assets -> according to “fair value” in accordance with IAS 40
  • Not more than 20% of (consolidated) assets can belong to a REIT service company
  • At least 75% of (consolidated) revenue and other operating income from rental, leasing or
  • letting including property sector activities or the disposal of immovable assets
  • Not more than 20% of (consolidated) revenue and other operating income from
  • REIT service companies
  • Distribution obligation
  • 90% of the HGB net income for the year less the reserve for disposal gains

No property trading

  • Proceeds from disposals within five years must not exceed 50% of the average value of the property portfolio

Minimum equity

  • (Consolidated) equity must amount to at least 45% of the value of the moveable assets -> restriction on borrowing
  • The relevant ratio is the REIT equity ratio

Caps on equity investments, minimum free float

  • Direct individual equity investments must be less than 10%, but a higher consolidated shareholding is possible if held through multiple companies
  • Minimum 15% free float (25% on IPO) -> free float = shareholders with an interest of less than 3%

Name of the company and its protection

  • The term “REIT Aktiengesellschaft” or “REIT AG” must feature in the company’s name
  • A non-REIT company cannot use the above terms or the terms “Real Estate Investment Trust” or “REIT” in its name

Share capital and form of shares

  • The minimum nominal amount of the share capital is €15 million
  • Only shares of the same class with voting rights are permitted


  • Admission to an organised market in a Member State of the European Union or in another state that is a party to the Agreement on the European Economic Area

Tax exemption

  • If all the above conditions are in place, the company is exempt from corporation and trade tax

HAMBORNER reports on it due compliance with the REIT criteria each year in its annual report under “REIT disclosures”.