Global REIT Market Rises to $764B

SYDNEY, AUSTRALIA-The advent of real estate investment trusts on the international stage continues to escalate, according to a new report by Ernst & Young that shows the market surging from $608 billion a year ago to $764 billion as continents such as Asia embrace the concept and additional countries continue to pass laws sanctioning the investment model. While not included in the 2007 review of 15 countries, Germany and Italy are the newest members of the REIT kingdom, and E&Y says future reports will include those countries.

While noting that some areas have fared better than others—with North America having its share of difficulties—the 76-page report shows the global REIT market growing against all key indices, including market capitalization, volume of trading and total rates of return. Singapore led the 14 other countries in the average total rates of return (capital and income) with an astounding 72.9% result, well ahead of the 42.6% posted by the next closest, South Korea. Japan was third at 42.4%. The UK, which just adopted REITs, was last at 10.8%, just behind the 11.8% recorded by US REITs.

As illustrated in the total return index, Asia has enjoyed a solid 12 months, registering strongly enough to be termed by E&T “the new REIT tiger.” Asian countries reviewed by E&Y also include Hong Kong and Malaysia. Led by 41 REITs in Japan, Asia now has 83 such vehicles, up from 75 a year earlier. The conglomeration of Europe, the Middle East and Africa saw the largest increase of REITs, rising from 59 to 102, but that was somewhat skewed by inclusion of the 29 UK and Turkey REITs for the first time. Only the US saw a decrease in REITs, falling sharply from 253 to 195. That is still well ahead of the second place finisher, Australia at 58.