REITs: The Way to Go – ESV Ayo
How to invest in the Real Estate Investment Trust (REIT) and take the advantages therein came to the fore on Monday, October 23, 2017, at the Town and Gown Interaction organised by the Department of Estate Management, Covenant University.
The facilitator, ESV. Doyin Ayo, who is the Principal Partner of Doyin Ayo and Associates (Estate Surveyors and Valuers), enlightened the participants made up of faculty, staff and students of the department when she spoke on, “Real Estate Investment Trust (REIT) as a Vehicle for Wealth Creation,” at the event.
ESV. Ayo noted that REIT is an American concept meant to enrich common people, which are gaining ground in Nigeria. “Real Estate Investment Trust Scheme is a company that owns or finances income producing real estate.”
Modeled after mutual funds, “REITs,” she said, “Provide investors all types of regular income streams, diversification and long-term capital appreciation. REITs typically pay out all of their taxable income as dividends to shareholders, who in turn pay the income taxes on those dividends,” she explained.
On the need to invest in REITs, ESV. Ayo informed the audience that they (REITs) typically provide high dividends because they are required by law to distribute at least 90 percent of their taxable income to their shareholders annually. Thus, they tend to be among companies paying the highest dividends.
REITs in Nigeria, according to the facilitator has its challenges which include title transfer, lack of awareness of the scheme, high cost of property maintenance, reporting standards, lack of regulation and inadequate manufacturing of building materials. However, despite the challenges, REITs, ESV. Ayo noted, is a very secure investment due to a lot of disclosures and transparency.
She therefore enjoined Estate Surveyors and Valuers to acquire the requisite knowledge in order to maximise the benefits.
The highlight of the event was the presentation of a plaque to appreciate the facilitator and the exchange of baton of leadership by the Estate Management Students’ Association