Real Estate Investment Trusts (REITs) in Indonesia - Part 2

Real Estate Investment Trust is known in Indonesian regulation terminology as “Dana Investasi Real Estate” or abbreviated nicely as DIRE (read: dee-ray or dē-rā). DIRE is not an exact translation of REIT. This is because Trust Law, heavily utilized in common law countries, is not recognized in civil law-based jurisdiction of Indonesia. Capital Market Law of 1995 managed to circumvent the non-existent of Trust Law by introducing a legal form known as Collective Investment Contract (CIC). CIC provides the legal basis for public pooling of investment funds to be managed by investment managers on behalf and for the benefit of the pooled investors. As such, the dominant form for collective investment scheme (CIS) in Indonesia is CIC. Even though PT (Corporation) is also...