Definition
Distribution (REIT/InvIT)
Distribution is the periodic payout — from rent, interest, dividend or capital return — that a REIT or InvIT pays to its unitholders.
SEBI requires REITs and InvITs to distribute at least 90% of their net distributable cash flows, usually quarterly. The distribution can be a mix of interest, dividend, and return of capital, each taxed differently in the hands of the unitholder.
Because these vehicles pass through most of their cash, the distribution yield is a key metric investors track, analogous to a dividend yield on a stock. The pass-through structure is what makes REITs and InvITs attractive to income-seeking investors.
Related terms
- REIT IPOA REIT IPO is the public listing of a Real Estate Investment Trust, which pools investor money to own income-generating commercial property.
- InvIT IPOAn InvIT IPO is the public listing of an Infrastructure Investment Trust, which pools capital to own operating infrastructure assets like roads and power lines.
- Dividend YieldDividend yield is the annual dividend per share divided by the share price, expressed as a percentage.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.