In 2006 the PLSA set the wheels in motion for a best-of-breed Real Estate Investment Trust (REIT) structure to be introduced in South Africa, actively engaging with government, including stakeholders such as National Treasury and SARS. The discussion paper is the outcome of this initiative.

In formulating its response, the PLSA -- the representative umbrella body of all the property loan stock companies on the JSE-Limited comprised of voluntary members with the weight of all the PLS companies within the sector behind it -- encouraged all its members and other stakeholders to participate in the process of submitting comments.

PLSA chairman Norbert Sasse reports that a special project group of the PLSA was convened to handle the discussion paper in a fully inclusive and consultative process, to provide constructive proposals on the white paper.

“Principle issues were analysed by the committee and the resultant submissions for amendments and changes were agreed upon. The document with proposed amendments was then circulated to the entire membership of the PLSA for further comments,” explains Sasse.

An open meeting of the PLSA was held where final comments and amendments were discussed and a revised document was then circulated to all members with the final comments. This document has been presented to National Treasury.

Andrew Brooking of Java Capital, appointed to co-ordinate the comments of PLSA members for this process, explained that the framework of REIT regulation proposed by National Treasury was considered by PLSA members to be broadly appropriate and that comments were directed at clarifying, enhancing and refining aspects of the proposals.

“The PLSA is committed to the process and we believe it is a substantial advancement in aligning South Africa’s listed property sector with global standards and we certainly welcome this positive development,” says Sasse.

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 amongst other countries.

The period for submissions on the draft paper closed 31 January 2008.