Real Estate Investment Trust

INVESTMENT 1
Real estate investment trust
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INVESTMENT 2
Real estate investment trust
PART A
Introduction
If I had $10,000 in cash I would invest in real estate investment trust (REITs). REITs can be
described as the regulated vehicle which is used by investors in joint investment in this sector, in
this area, the willing investors invest their funds which is later invested in a trust with an
intention of making profit or sometime the income from the selected real estate. Additionally, in
the long run REITs is supposed to source the capital which is used in building or sometimes to
acquire the real estates which is sold later or rented with the aim of generating income (Su Han
Chan, 2012). In REITs, mostly the income or profit generated from the said project is
distributed among the company shareholders in end of every financial year. Also, the said
company in many cases operates the income producing estate or assets which might include
warehouses, office building, resorts, shopping malls, hotels and sometimes the apartments.
Differences between these investment vehicles (quoted Property Company and REIT)
United Kingdom’s property market have exponential grown for the last few year. However, in
the same market financial costs for development have continued to be very high despite the same
market being undersupplied mostly the housing for the lower segment of the market. In the real
market, the higher cost associated with the development of the real estates as well as the
undersupply of the houses have proven to be the biggest challenge toward improving this sector.
To rectify this the government is encouraging the investors to invest in real estate through the
program known as the REITs. REITs are traded just like the stocks which the interested investors
can invest on by buying and selling shares, although, it is regulated by the capital market

INVESTMENT 3
authority (CMA). In the long run, REITs allows fund-raising for the development or buying the
real estate from many investors who are willing to do so. There are many different REITs in
different countries, for instance, in Kenya a country in Africa some of the different REITs
managers include Stanlib, CIC asset, UAP investment and Nabo capital management limited.
Selection of investment/ company and reasons for that selection
I have decided to invest in REITs due to some benefits which are attached to its investment.
Although also other type of investment have some attached advantages, I would like to invest on
REITs. One of the biggest advantage associated with REITs is that it is exempted from double
taxation in the long run (Azmi Omar, 2013). This means that shares are exempted from
corporate tax and also it is exempted from the income tax except for the payment of withholding
tax on interest income as well as the income and dividends.
Explanation of how the current performance of the property market in the UK and Europe
has affected your decision
Other benefits associated with investing on REITs include
a. Capital access and access to investment-One of the advantages of REITs is capital access
and access to investment. This is an advantage because, the REITs gives room for
deployments of an individual or group savings in the long run. To many investors who
have invested their time and resources to REITs, this means that it will give a chance to
them in the long run to invest in this market. The higher the number of investors in the
market the higher the chances of making more profits in the long run. Most of those who
will benefit a lot as a result of allowing many investors in the market are middle income
class who can fully and easily access to the ownership in this growing sector.