The Qualitas Real Estate Income Fund which listed in 2018 has been added to the ASX All Ordinaries Index and has been classified by Standard & Poor’s (S&P) as a Mortgage Real Estate Investment Trust (MREIT), making it the only fund in Australia classified as MREIT.
What does this mean for Qualitas?
Qualitas Limited one of Australia’s leading alternative real estate investment managers and the manager of QRI said the All Ords listing took effect prior to the opening of trading today. Mortgage Real Estate Investment Trusts (MREITs) are companies or trusts that service, originate, purchase and/or securitise commercial and/or residential mortgage loans.
Mark Power, Head of Income Credit, Qualitas, said that QRI’s classification as an MREIT is due to the fund’s singular commercial real estate credit investment focus. “The classification to MREIT means that QRI may potentially be considered and evaluated for ASX300 and ASX300 A-REIT inclusion in the future. While future inclusions in these indices is not certain and solely determined by S&P, we are very pleased that this development opens up these possibilities.”
How different is QRI from US MREITs?
Mr Power said that while S&Ps definition of MREITs is global, QRI differs from US MREITs because there are no liabilities in QRI, other than the warehouse facility between Qualitas and QRI, meaning it benefits from rising interest rates passed through for variable rate loans.
“It is important to note the fund structure, underlying portfolio, investment origination, distribution cycle and management process all remain unchanged. Investors can continue to access QRI through existing distribution channels and the benefits of investing, like regular income and commercial real estate exposure without ownership risk, remain,” he said.