What is a REIT?

A real estate investment trust, or REIT, lets many investors own a share of income-producing property, such as shopping malls, offices or housing projects, without buying a building themselves.

The REIT owns the property and pays out most of its rental income to unit holders. Units of listed REITs trade on the Pakistan Stock Exchange like shares, so you can buy or sell them through a broker. In Pakistan, REITs are run by management companies regulated by the SECP. Dolmen City REIT, which owns Dolmen Mall Clifton and an office tower in Karachi, was among the first.

REITs offer regular income and access to property with a small amount of money. Their prices still move with interest rates and the property market, and development REITs, which build rather than rent, carry more risk than rental REITs.

Tokenized property, covered in the tokenization lesson, takes the same idea onto a blockchain.