What is a Stapled A-REIT

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One thing you'll notice about A-REITs is that some are described as "stapled" and some as "units."

The one organized as "units" are trusts similar to U.S. REITs.

Stapled REITs are investment vehicles which actually include two or more separate but related entities. They actually have separate units, but those don't trade separately -- they're stapled together, so to speak. You can buy and sell only the overall entity.

Stapled A-REITs is for Australia

It's often the case that with stapled A-REITs one company owns and operates real estate as U.S. equity REITs do, while one or more companies issue investment funds which are like small mutual funds which invest in real estate portfolios put together by the entity.

I can't recall seeing this in U.S. or Canadian REITs, so I can only assume it's against the law in those two countries. The idea of a real estate company issuing its own mutual funds seems odd to me, though apparently not to Australians.

U.S. REITs used to have the staple structure, but Congress felt that this violated the spirit of the REIT tax preference treatment and outlawed in 1984, though some were grandfathered.

Next: Trinity Limited -- commercial real estate properties and funds for investors

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