REITs (Listed & Private)
REITs offer investors access to income-producing properties through listed and private structures, each with distinct trade-offs in liquidity, transparency, and investment accessibility.
Introduction
Real Estate Investment Trusts, or REITs, are one of the most accessible and popular ways to invest in real estate without the need for direct ownership. By purchasing units or shares in a REIT, investors gain exposure to companies that own and operate income-generating properties. Returns are generated through rental income distributions and, in some cases, capital appreciation.
REITs generally fall into two broad categories: listed REITs, which trade on public stock exchanges, and private REITs, which are not publicly traded and are typically offered only to accredited or institutional investors. Each option carries different implications for liquidity, accessibility, transparency, and risk, making it important for investors to understand which approach aligns with their goals.
What is a REIT?
A REIT is a company that owns, operates, or finances real estate and distributes a significant portion of its income to shareholders. In many jurisdictions, including Singapore, REITs are required to distribute at least 90% of their taxable income as dividends to qualify for favorable tax treatment.
This structure makes REITs a unique hybrid between real estate and equities: they provide steady income from property while retaining the flexibility of stock ownership for listed vehicles.
Listed REITs
Listed REITs are publicly traded on stock exchanges, which means investors can buy and sell units just like ordinary shares.
They are defined by their liquidity, as units can be traded daily during market hours, and by their transparency, since listed entities are subject to strict reporting requirements. Minimum investments are low, often just the price of a single share or unit, making them accessible to retail investors.
The benefits are clear: they are easy to enter and exit, suitable for a broad investor base, and provide instant diversification across multiple properties and sectors. However, listed REITs are also subject to stock market volatility. Unit prices can swing due to broader market sentiment, even when the underlying properties remain stable. Investors also have no direct control over property-level decisions, as management is handled by the REIT operator.
Private REITs
Private REITs, on the other hand, are not publicly traded. Units are sold through private placements and are typically offered to accredited or institutional investors.
These vehicles are characterised by illiquidity, as they do not trade on public markets, meaning capital may be locked in for several years. They also carry higher minimum investment thresholds, often ranging from hundreds of thousands to millions.
The trade-off for reduced liquidity and accessibility is the ability to pursue customized strategies. Private REITs may focus on niche markets, development projects, or specific geographies where listed REITs might not venture.
The pros include the potential for higher or more stable yields, given reduced exposure to public market volatility, and access to specialised opportunities. The cons are that they are harder to exit before maturity, offer less transparency, and require greater trust in the sponsor’s expertise.
Key Differences Between Listed & Private REITs
The differences between the two types of REITs can be summarised across several dimensions. Listed REITs offer high liquidity, low entry requirements, and regulatory transparency, but they are exposed to stock market swings. Private REITs, in contrast, require larger commitments, are generally illiquid, and offer less transparency, but they may provide access to specialised opportunities with more stable cash flow.
How REITs Generate Returns
Both listed and private REITs generate returns in similar ways. Dividend income comes from rental income and other property-related revenue, typically distributed regularly to investors. Capital appreciation may occur if the value of REIT units rises over time. In addition, portfolio growth can be achieved when the REIT reinvests earnings or expands through acquisitions, compounding returns.
How RealVantage Complements REIT Investing
While REITs provide investors with exposure to diversified real estate portfolios, they can feel “broad brush” in nature. At RealVantage, we complement REIT investing by offering deal-by-deal access to institutional-grade properties. This gives investors the ability to:
- Choose specific assets rather than being tied to an entire REIT portfolio.
- Gain targeted exposure to markets or sectors not always covered by REIT holdings.
- Benefit from professional management without the volatility of public equity markets.
This approach allows investors to combine the diversification and convenience of REITs with the precision and control of selective direct participation.
Next in the Series
📖 Read next: Limited Partnerships & LLCs — Learn how these structures work for holding and managing real estate investments.
About RealVantage
RealVantage (operating as RV SG Pte. Ltd. in Singapore) is a leading real estate co-investment platform, licensed and regulated by the Monetary Authority of Singapore (MAS), that allows our investors to diversify across markets, overseas properties, sectors and investment strategies.
The RealVantage team comprises professionals across real estate, corporate finance, technology, venture capital, and startup growth. The platform combines institutional deal sourcing with structured underwriting and portfolio diversification capabilities. The team is led by a distinguished Board of Advisors and advisory committee who provide cross-functional and multi-disciplinary expertise to the RealVantage team.
The company's philosophy, core values, and technological edge help clients build a diversified and high-performing real estate investment portfolio.
Get in touch with RealVantage today to see how they can help you in your real estate investment journey.
Disclaimer: The information and/or documents contained in this article do not constitute financial advice and are meant for educational purposes. Please consult your financial advisor, accountant, and/or attorney before proceeding with any financial/real estate investments.