REITs vs Property Companies

		Earning Profile
REITs		A REIT is driven by recurring rental income.
Property Companies		A property company seeks a combination of property
		sales, development profits, rental income and property
		investments.
		Capital Struture and Cash Flow
REITs		A REIT has low and defined level of retained earnings,
		low debt level defined by the regulators and strong cash
		flow from operations.
Property Companies		A property stock has a high gearing ratio due to high
		capital expenditure required for property development
		and sometimes negative cash flow, and low dividend
		payouts.
		Dividend Distribution Policy
REITs		A REIT will distribute 90% - 100% of its retained
		earning before tax.
Property Companies		A property stock has no certainty of a dividend payout.
		Risk Profile
REITs		A REIT is a low risk, passive investment
		vehicle with a high certainty of cash flow vehicle with a
		from rentals derived from lease agreements with tenants.
Property Companies		A property stock has a high development & financial risk.
		Corporate Governance
REITs		REITs are governed by multiple layers of stakeholders -
		unitholders, manager, trustees, regulating authorities
		ensuring that interest of minority unitholders are
		protected.
Property Companies		A property stock is often dominated by a controlling
		shareholder which raises conflict of interest issues with
		minority shareholders.