Real Estate Investment Trusts (Reits) and business trusts are two separate investment vehicles that aim to provide investors with a steady stream of income.
The former, as the name implies, hold mainly property. The assets are held in trust by a trustee and a manager is appointed to manage the Reit. The rental income is used to pay out dividends to unit holders.
Business trusts, on the other hand, is a hybrid structure consisting of a business and a trust. Typically, the business will be in a sector that provides stable income like utilities. The trustee has legal ownership of the assets, and is also the manager.
This sponsored article Reits or Business Trust by MoneySense looks at the two different structures in more details and also spells out the key differences.
Of the many different kinds of risks mentioned, I would like to highlight specifically leverage risk. This is the part where many Reits and even business trusts have failed to manage prudently. You can refer to my article Are Singapore Reits a Good Investment? and bear some of those points in mind when selecting a Reit or business trust entity to invest in.