Share this page:
Stay connected:
Welcome to the Citywire Money Forums, where members share investment ideas and discuss everything to do with their money.

You'll need to log in or set up an account to start new discussions or reply to existing ones. See you inside!

Notification

Icon
Error

REIT Investment Trust or shares
Road-Man
Posted: 26 January 2017 22:03:26(UTC)
#1

Joined: 12/04/2016(UTC)
Posts: 9

Thanks: 17 times
Looking to diversify my prortfilio and would like to invest in property. Is there a difference in these types of investments;

REIT shares such as British Land or Land Securities

compared to;

Investment trusts such as F&C Commercial Property or Schroder Real Estate Investment SREI?
Lortag
Posted: 10 May 2018 21:39:18(UTC)
#2

Joined: 10/04/2016(UTC)
Posts: 7

Was thanked: 3 time(s) in 3 post(s)
I would also like an answer to the same question.

F&C Commercial Property (FCPT) and Schroder Real Estate Investment (SREI) are REITs but also members of the Association of Investment Companies (AIC) and MorningStar lists them in their Investment Trust pages under the Property Direct - UK sector.

British Land (BLND) and Land Securities (LAND) are also REITs, but are not members of the AIC and MorningStar lists them in their Equities pages under the Real Estate sector.

Why are they treated differently?

1 user thanked Lortag for this post.
Road-Man on 11/05/2018(UTC)
Alan Selwood
Posted: 10 May 2018 22:34:22(UTC)
#3

Joined: 17/12/2011(UTC)
Posts: 2,711

Thanks: 555 times
Was thanked: 4481 time(s) in 1624 post(s)
The first two are portfolios of property holdings, the latter are individual companies.

You can't really compare 'apples' and 'bananas', so the individual companies are left out of the rankings.

They opted to be REITs because of the tax treatment.
1 user thanked Alan Selwood for this post.
Road-Man on 11/05/2018(UTC)
PaulSh
Posted: 11 May 2018 08:00:00(UTC)
#4

Joined: 02/12/2014(UTC)
Posts: 101

Thanks: 23 times
Was thanked: 143 time(s) in 79 post(s)
My "REIT mystery" is why BBGI SICAV SA shares are traded like a closed-ended trust when SICAVs by definition are open-ended. Does the SA (limited company) own a set amount of an underlying real SICAV?
1 user thanked PaulSh for this post.
Mr Helpful on 11/05/2018(UTC)
Road-Man
Posted: 11 May 2018 17:59:17(UTC)
#5

Joined: 12/04/2016(UTC)
Posts: 9

Thanks: 17 times
Alan Selwood;61929 wrote
Quote:
The first two are portfolios of property holdings, the latter are individual companies.

You can't really compare 'apples' and 'bananas', so the individual companies are left out of the rankings.

They opted to be REITs because of the tax treatment.


I thought BLND and LAND were companies with a portfolio of property holding as well. So I dont understand what is different from the investment trust?
Big boy
Posted: 11 May 2018 18:42:25(UTC)
#6

Joined: 20/01/2015(UTC)
Posts: 350

Thanks: 50 times
Was thanked: 459 time(s) in 198 post(s)
The AICs was the AITs but many ITs (for tax reasons) moved offshore and become Investment Companies. I prefer BLND,Hammerson and LAND as on massive discounts. The Investment Companies also have gearing which helps inflate yields and theirfor investors happy to pay close to NAV..
Stephen B.
Posted: 11 May 2018 20:15:39(UTC)
#7

Joined: 26/09/2012(UTC)
Posts: 297

Thanks: 15 times
Was thanked: 223 time(s) in 128 post(s)
I think the main point about British Land et al is that they're property developers, not just owners who collect rents.
mark spurrier
Posted: 12 May 2018 13:04:37(UTC)
#8

Joined: 17/01/2018(UTC)
Posts: 16

Was thanked: 8 time(s) in 6 post(s)
Stephen B.;62162 wrote:
I think the main point about British Land et al is that they're property developers, not just owners who collect rents.



So is NRR

I think the only difference is the structure

REIT pays out virtually all income as distributions, property companies can chose to pay out what they want as ordinary dividends - they are different company structures and types of legal entity
Stephen B.
Posted: 12 May 2018 13:27:35(UTC)
#9

Joined: 26/09/2012(UTC)
Posts: 297

Thanks: 15 times
Was thanked: 223 time(s) in 128 post(s)
At a quick look at the NRR accounts it doesn't look to me that it does a substantial amount of development, it mainly talks about purchasing and it has a tiny number of employees. According to the LSE web site:

"In particular, a potential UK-REIT has to carry out a property rental business which can be a UK property investment business or an overseas property investment business. At least 75% of the group’s profits must derive from that property rental business and at least 75% of the group’s gross assets must comprise assets or cash involved in the property rental business."
+ Reply to discussion

Markets

Other markets