REIT

The term REIT (Real Estate Invetstment Trust) indicates a public limited company, whose assets exclusively consist of properties. REITs are a globally acknowledged standard for indirect property investments.

The earnings of REITs originate from both the sale and the letting or leasing of properties and plots of land. In contrast to classical property corporations, REITs are characterised by tax benefits (exemption from corporation and trade tax at company level) and a compulsory dividend payout ratio. Moreover, shareholders benefit from high corporate transparency standards as well as the tradedability of shares due to the stock-exchange listing.

A public limited company must satisfy various requirements in order that it can obtain the German REIT status. The following should be mentioned here, amongst other factors:

  • tickmark Stock-exchange listing
  • tickmark > 45% equity ratio
  • tickmark > 15% free float ratio
  • tickmark > 75% of the assets must be invested in properties
  • tickmark < 10% directly held shares per shareholder
  • tickmark > 75% of earnings must originate from property management
  • tickmark > 90% payout ratio of the profit for the financial year under the German Commercial Code

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