The REITs revolution

It is since about 2000 that the international market for tax-privileged publicly listed real estate companies started to explode. More and more countries since then have introduced vehicles which orientate on the US-model. Meanwhile some speak about the “REITs revolution”.

In June 2006 the “REIT week”, an annual conference organized by the US umbrella NAREIT focused on the growth of REIT industries outside the USA. The property market capitalisation of REITs today is 700 bn $US, speakers at the NYC meeting reported, - more than half outside US. Australia, Belgium, Canada, Australia, Turkey, Thailand, Malaysia have shown strong growth. “The aim is to create free flow of capital throughout the world”, a speaker stated. “We are only at the beginning.” (1)

Later in the year NAREIT published: “For U.S. investors in particular, investing outside of their domestic market now means they can gain exposure to emerging REIT markets in Europe and Asia. Based on the historic growth, performance and diversification benefits of the U.S. REIT market, this could offer some very interesting opportunities going forward.”

In the first seven months of 2006 private investors spent more on Real Estate Investment Trusts than in any period before. From January to July the transaction volume amounted to 47 billion US Dollar.

The return from REITs worldwide has more than doubled since the beginning of 2003.

Pension funds and insurers are among the biggest investors in REITs. The California State Teachers’ Retirement System, the second-largest US pension fund, plans to almost double the proportion of its assets invested in real estate to 11 percent in the next six years from 6 percent in 2006. Its investments last year included REITs in the US and France. (2)

National REITs and similar structures around the world

According to national law REITS have diverse names in the various countries.

Country	Name	Acronym	Introduction in
USA	Real Estate Investment Trust	REIT	1961
Netherlands	Fiscale Belegginstinstelling	FBI	1969
Australia	Listed Property Trusts		1971
Turkey	Gayrimenkul Yat *‘r*‘m Ortakligi	REIT	1989
Canada	Real Estate Investment Trust	REIT	1994
Brazil	Fundos de Investimento Imobiliário	FII	1993
Belgium	Société d’Investissement à capital fixe en immobilière	SICAFI	1995
Greece	Real Estate Investment Company	REIC	1999
Taiwan	Real Estate Investment Trust	REIT	2003
Japan	Real Estate Investment Trust	J-REIT	2001
Korea	Korean Real Estate Investment Trust	K-REIT	2001
	Corporate Restructuring REIT	CR-REIT	2001
Singapore	Singapore Real Estate Investment Trust	S-REIT	2002
France	Sociétés d’Investissements immobiliers cotées	SIIC	2003
Hongkong	Hongkong Real Estate Investment Trust	H-REIT	2003
Russia			2003
Bulgaria			2004
Israel		Keren	2006
Malaysia	Islamic REIT		2006
U.K.	Property Investment Fund (Project)	PIF	planned 2007
Germany	Deutsche REITs (Project)	G-REIT	planned 2007
India			planned
Pakistan	Islamic REIT		planned
Dubai	Islamic REIT		planned