REIT (Real Estate Investment Trust)

A REIT is a company that owns, operates, or finances income-producing real estate — including data centers — and is required to distribute at least 90% of taxable income to shareholders as dividends in exchange for favorable corporate tax treatment. Data center REITs such as Digital Realty and Equinix control a large share of global colocation capacity and trade on public markets, giving investors exposure to colocation real estate without operating facilities directly. The structure originated in the US but is also used for data center assets in a few APAC markets, including Singapore (S-REITs) and Japan (J-REITs). Because REITs must pay out most profits rather than retain them, they typically rely on cap rate spreads and debt financing to fund new development, and their quarterly filings are a major public source of colocation pricing, occupancy, and lease-term data for the industry.