How the fund's profitability is formed

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REIT returns are based on several key sources that provide stable and predictable income for investors:

Rent payments . Most of the REIT's income comes macedonia whatsapp phone number from renting out real estate, including office space, shopping centers, hotels, and warehouses. Rent payments are the fund's primary and most reliable source of income. Long-term leases provide a regular cash flow that is distributed to shareholders in the form of dividends, making the REIT attractive to those looking for stable passive income.
Real estate value growth . The second important source of income is the increase in the value of the real estate owned by the fund. Over time, the value of real estate may increase, especially in favorable economic conditions and high demand. If prices increase significantly, the fund may decide to sell some properties, which will lead to an increase in capital. However, this source of income is more volatile and depends on the macroeconomic situation and changes in market demand.
A special feature of REITs is that, in accordance with US law, such funds are required to pay out at least 90% of their profits to shareholders in the form of dividends. This mandatory requirement makes REITs particularly attractive to investors looking for stable income.

However, the obligation to pay out the majority of profits as dividends limits the fund's ability to reinvest, which may constrain the potential for long-term earnings growth.



How to Invest in REITs
Until 2023, Russian investors could purchase REIT shares through local brokers, but after the introduction of sanctions, access to these instruments was limited.

Currently, the only way to invest in REITs is to use overseas brokers, which comes with certain risks such as asset freezes.

In order to purchase REIT shares, an investor must open a brokerage account with a foreign broker, which may only be available to qualified investors.



Alternative to REITs
In Russia, there is no classic analogue of REIT, but there are closed-end real estate mutual investment funds (ZPIF), which can serve as an alternative.

Unlike REITs, closed-end mutual funds are not legal entities, and their profitability depends on the efficiency of asset management by the management company. The main differences between closed-end mutual funds and REITs include the absence of mandatory dividend payments and a higher entry threshold.

Mutual funds can invest in a variety of real estate types, including residential and commercial properties, and offer a variety of investment strategies, from leasing real estate to building and selling it.