The Malta Stock Exchange has recently been given approval by the MFSA to change its Bye Laws to allow for the listing of REITs or Real Estate Investment Trusts. REITs are companies that own income producing real estate properties and offer investors an opportunity to share income from rent generating real estate investments. They are designed to offer diversified exposure to different real estate properties which could be single family units, multi-family units, commercial properties or a combination of the three.
Unlike owning a single property, having exposure to REITs reduces an investor’s real estate risk exposure by spreading out risks to different properties in varying locations. To qualify as a REIT listed on the Malta Stock Exchange a company must own a minimum of three distinct and non-contiguous properties with a market value of over 9 million euros. The company must generate at least 75% of its total revenue from rent producing properties and must distribute at least 85% of the distributable profits to shareholders through annual dividends. REITS will trade as shares on the Exchange, offering investors daily liquidity, a benefit not available when owing physical property.
The Chairman of the Malta Stock Exchange Mr. Joseph Portelli said “We are proud of this win/win initiative which will offer property owners an additional avenue from where to market their real estate holdings by packaging them into regulated tradeable securities. It will also better enable investors an opportunity to invest in a diversified real estate portfolio with as little as a few euros. Over the last five years the Exchange has rolled out multiple products including a simplified financing vehicle for SMEs, exchange traded funds (ETFs), securitized products, REITS and soon green bonds.”
On December 10 at 2pm the Exchange will be hosting a webinar to officially rollout its new REIT Bye Laws. Investors and stakeholders can email firstname.lastname@example.org to receive an invitation to attend this event.