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CS Professional · Strategic Management and Corporate Finance · Real Estate Investment Trusts

Under the REIT Regulations, at least what percentage of the net distributable cash flows of the REIT must be distributed to unitholders, as the prescribed minimum?

A REIT must distribute at least 90 per cent of its net distributable cash flows to unitholders. This is the prescribed minimum payout, so 50, 75 or a compulsory 100 per cent are incorrect.

  1. A50 per cent
  2. B75 per cent
  3. C90 per centCorrect
  4. D100 per cent

Explanation

The regulations require not less than 90 per cent of NDCF of the REIT to be distributed to unitholders. The 75 per cent figure is not the REIT threshold, and 100 per cent is not mandated. The SPV level also has its own distribution requirement to the REIT.

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