The treasury's publication of a discussion paper on a proposed real estate investment trust (Reit) structure for South African listed property companies and funds is good news for the sector.

The document indicates the South African listed property sector could have a new Reit structure by 2009, which would align it with global listed real estate markets.

A number of South African listed property companies and funds that have conducted international road shows to woo foreign investors have said there is strong foreign interest in the local property sector.

Adopting a Reit structure would certainly improve the sector's chances of attracting foreign fund managers.

The reason for this is that the Reit structure is familiar to overseas markets, while the listed property loan stock and property unit trust structures in SA are alien concepts to many foreign investors.

The Property Loan Stock Association (PLSA), which represents listed and unlisted property loan stock companies, has been at the forefront of the movement to adopt Reit legislation in SA.

It hosted a conference called Reits Reality in August last year, where consensus was reached to pursue the introduction of the structure.

The Reit structure was initiated in the US in 1961 and has been adopted by the UK, Australia, France, Canada, Japan, Singapore and The Netherlands, among other countries.

The PLSA pursued this goal and engaged with the government, including the treasury and the South African Revenue Service, with the objective of encouraging the establishment of Reits in SA.

It seems this work has paid off and that SA's listed real estate sector will soon join the rest of the world in adopting Reits.