What is REIT and why it is important

The Real Estate Investment Trust (REIT) format has long established itself in developed markets. The model operates in the US, UK, Singapore and other countries. At the end of 2023, there were 940 such funds operating globally with a total capital of more than $3.2 trillion, according to the AIFC report. With North America accounting for 44% of the market share and Asia Pacific accounting for 35%.

The main advantage of REITs is the ability to generate income from real estate without the need to directly own and manage it. This makes the instrument in demand and significantly reduces risks for investors. In some countries, such funds also have favorable tax treatment provided that the majority of profits are paid out in the form of dividends.

Feature of TSPG REIT

TSPG REIT Umbrella Fund was created as an umbrella fund - a collective investment scheme that combines several sub-funds in one legal entity. Each sub-fund operates as a separate portfolio with its own investment strategy, assets, liabilities and performance. TSPG provides access to premium commercial real estate assets without the need for direct management.

The umbrella fund model also gives investors a choice of assets based on risk, return and geographic specificity. In addition, AIFC's international standards-oriented regulatory framework creates a transparent and predictable environment for investors.

TSPG is focused on Class A properties with high underlying value and rental income. Its portfolio now includes the Dostyk Plaza and Shymkent Plaza shopping malls of Kazakh entrepreneur and investor Serik Tolbassy.

“We focus on objects with stable cash flows, located in promising locations. Our goal is not only to provide stable dividend income, but also long-term growth in asset value,” says TSPG CEO Almas Idrisov.

Also among the key advantages for TSPG investors:

● Minimization of currency risks - dividend income and share price growth income indexed to the US dollar exchange rate.

● Diversification - the umbrella structure reduces risk by offering a balanced portfolio of assets.

● Inflation protection - real estate traditionally retains value over the long term.

● Transparency - the fund operates in an AIFC jurisdiction with international regulatory standards.

In addition, investors have the option of secondary sales of shares to other investors in the fund. The availability of such an alternative allows to increase the liquidity of shares, minimize the risk of sharp price fluctuations and create convenient mechanisms for entering and exiting the asset.

For whom this tool is for

Investments in TSPG are designed for professional investors. The minimum investment threshold is $50 thousand, and the requirements for the investor's liquid assets are from $100 thousand. This approach is aimed at an expert audience that understands the specifics of real estate funds and is ready for long-term investments.

“We focus on investors who understand the market and the characteristics of the instrument, know the risk and return profile of their portfolio of investment assets, and are ready to invest for long periods of time - more than three to five years. We offer assets with a transparent structure, stable cash flow and the potential for growth in capital value”, - said Asset Abdygapparov, General Director of Provident Fiduciary, Fund Manager of TSPG.

Potential risks and ways to minimize them

As in any investment, there are certain risks: cyclicality of the commercial real estate market, geographical concentration and devaluation of the national currency. However, competent management allows you to minimize their impact.

“Through diversification, in-depth market analysis and adaptation of the best international practices, we create a “safety cushion” for investors. Today TSPG is not just a fund, but an entire ecosystem where every risk is calculated and every opportunity is realized”, - said Almas Idrisov.

He added that for those who are considering long-term investments in real estate, but do not want to face operational management, TSPG may become the optimal solution. It will allow investors to participate in the development of the largest multi-purpose real estate fund in Central Asia.