The Malta Stock Exchange has issued a Market Consultation Document on the Admission Requirements and Disclosure Standards for Real Estate Investment Trusts (‘REITs’). REITs which satisfy these requirements as well as those set out in Chapter 5 of the Bye-Laws of the Malta Stock Exchange will be classified as eligible financial instruments which may be listed on the Exchange.
The principal requirement for being admitted to listing is the issuance of a report by an Auditor prior to each accounting period confirming that the issuer has met certain conditions, inter alia:
The consultation document also includes requirements which must be satisfied at the end of the Specified Accounting Period and also within three years from the date on which the Issuer becomes eligible to be admitted as a REIT. The Issuer must have a Property Rental Business, which is defined as “owning immovable property whether residential or commercial for the purposes of renting out to third parties and receiving rental income therefrom”. Immovable property must be “designed, fitted or equipped for the purpose of being rented, and it is rented or available for rent as a residential or commercial unit”. The Property Rental Business must include at least three immovable properties in Malta or overseas and must not include immovable property which is owner-occupied. Furthermore, one immovable property cannot represent more than 40% of the total value of immovable properties forming part of the Property Rental Business.
Other requirements include:
Once the Exchange receives the Auditor’s report, it will determine whether the Issuer’s business is eligible to be classified as a REIT. Once such confirmation is received, the Issuer must make a Statement to the Exchange confirming its adherence to the requirements outlined above in respect of each accounting period.