Gearing of REITs

I have had some questions on what is meant by gearing of REITs and how it could affect a REIT.

What is gearing?
In the most simple terms, gearing is calculated by the amount of liabilities dividends by the total assets valuation.

Let's say for REIT X, the valuation of all its buildings and assets comes out to $1 billion. The total liabilities is $300 million. This will work out to a gearing of 30%. [I stand to be corrected in my concepts. Feel free to comment if my understanding is wrong.]

Different countries would have different policies for the maximum gearing for a REIT. In Singapore, there's a cap of 35% gearing.

Intro to REITs Investment

What are REITs?
REITs stand for Real Estate Investment Trusts. They are specialized companies that invest in commercial, industrial, residential and healthcare real estates. Examples on the Singapore Stock Exchange includes CapitaCommerical Trust (Commercial), Cambridge Industrial REIT (industrial), Saizen REIT (residential) and Parkway Life REIT (healthcare). These companies buy and manage properties including shopping malls, offices, hotels, hospitals.

REITs usually pay a generous dividend because they are required by law to distribute most of their earnings to shareholders. In exchange, they receive tax incentives.