09/13/2013 | By Allen Kenney
With 34 countries having now adopted the REIT approach to commercial real estate investment, the total market capitalization of REITs around the world has reached $1.1 trillion, according to research from the European Public Real Estate Association (EPRA).
The 2013 edition of the EPRA Global REIT Survey has been released and includes comprehensive information on every major REIT or “REIT-like” regime around the world. Philip Charls, CEO of EPRA, said the global expansion of REIT regimes reflects the recognition of the inherent benefits that the approach can provide to commercial real estate markets and economies.
“Ireland's entry into the survey and South Africa’s new regime are just the latest striking examples of how more and more governments are realising that they can draw in the private investment they desperately need in our cities and reach their sustainability targets by facilitating the expansion of REITs,” Charls said. “These are companies that develop, own and operate property. REITs play a major role in contributing to their local economies through job creation, providing accommodation for businesses and citizens, investments in improving the urban environment, and adopting cutting edge environmental standards and technologies in their buildings.”
EPRA’s survey detailed a handful of developments that it says represent improvements to existing REIT regimes. They include the United Kingdom’s removal of the conversion charge for real estate companies attaining REIT status. Also in the U.K., AIM companies have the ability to elect to REIT status. In Spain, a “significant barrier” to the growth of REITs was removed by cutting the corporate tax rate from 19 percent to 0 percent, according to EPRA.
“These changes reflect the growing awareness among governments that the REIT concept is an effective policy tool for channelling professionally managed capital into the business of delivering and operating the built environment,” said Gareth Lewis, finance director at EPRA.
EPRA represents the publicly traded European real estate sector. It has more than 200 members and represents approximately $330 billion in European commercial real estate assets.