07/08/2016 | by
Article Author(s)

S&P Dow Jones Indices has published the revised structure of the Global Industry Classification Standard (GICS) that will take effect after the close of trade on Aug. 31, when stock exchange-listed Equity REITs and other listed real estate companies are elevated to a new Real Estate Sector.

Under the GICS four-tier classification system, the broad Real Estate Sector will house the Real Estate Industry Group, which is separated into the Equity REITs Industry and the Real Estate Management & Development industry. Those two industries are divided into Sub-Industries, to create the fourth and final tier.

Equity REITs will be classified in the following eight Sub-Industries:

  • Diversified REITs;
  • Industrial REITs;
  • Hotel & Resort REITs;
  • Office REITs;
  • Health Care REITs;
  • Retail REITs;
  • Residential REITs; and
  • Specialized REITs.

Real Estate Management & Development companies will include the following Sub-Industries:

  • Diversified Real Estate Activities;
  • Real Estate Operating Companies;
  • Real Estate Development; and
  • Real Estate Services.

Under the revised GICS structure, Mortgage REITs will remain within the Financials Sector, but will be elevated from the Sub-Industry level to the Industry level.

In addition, a list of specific companies affected by the changes was also released. It includes 549 listed securities of Equity and Mortgage REITs worldwide, and confirms that all companies previously classified as Equity REITs in any of the eight Sub-Industries of the Financials Sector have been reclassified as Equity REITs in the new Real Estate Sector. Importantly, the new GICS structure recognizes that all property sectors represented by Equity REITs are properly classified as part of the Real Estate Sector.