A REIT has a well defined investment policy and invests primarily in income-generating properties, while a property company is not restricted to doing business in property investment and property development.
According to existing SFC regulations, the dividend payout ratio of a REIT has to be at least 90 per cent, while the dividend policy of a property company may change from time to time. A REIT may borrow up to 45 per cent of its gross asset value, while a property company may borrow more.
Besides, a property stock is essentially a company, while a REIT is a trust. To ensure proper checks and balances, a REIT must appoint an independent trustee to oversee its operation of the safekeeping of its assets for unit holders.