Of different shares of trust

IT trades like a real estate investment trust (Reit), and often emulates its characteristics, but business trusts (BTs), sometimes loosely labelled the "poorer cousin" of Reits, operate very differently from Reits.

Broadly speaking, the key differentiating factors between Reits and BTs lie in their development restriction, gearing limit, and minimum distribution payout.

Taking development restriction as an example, Reits have a development cap of up to 10 per cent of its asset value. In addition, they have to maintain a minimum distribution of at least 90 per cent of distributable profits, which in turn grants the vehicle tax transparency. Finally, Reits have a gearing limit of 35 per cent of assets, and 60 per cent of assets if they have a credit rating.