The global adoption of the REIT model has been a true success story over the past 60 years, and a testament to the enduring vision, durability, and evolution of this unique investment vehicle.
Nareit has played an essential role in reaching out to new markets to educate investors and provide critical knowledge and information for countries and regions considering REITs. The numbers speak for themselves. Across the globe, 41 countries and regions have adopted the REIT approach to real estate, with a number of additional countries considering the option.
The investment benefits REITs bring in terms of diversifying portfolios and producing reliable, healthy returns—as well as strengthening economies and local communities—are well established at this point. Indeed, equity market capitalization of listed REITs globally has jumped from about $10 billion in 1990 to more than $2.5 trillion today.
As you will read in this issue, much of the recent expansion of the global REIT model has occurred in the Asia Pacific region, where new REIT legislation approved in China last year has the potential to substantially propel growth over the next decade. In the words of one observer, as the REIT model gains traction throughout the globe, and listings increase, “REITs become too large to ignore for investors.”
Importantly, observers point out that while REITs have certainly gained in popularity, there is still a long way to go before the market is oversaturated. For example, listed REIT penetration into overall commercial real estate is around 15% in the United States and lower than that in most other markets.
As an industry, we should take pride in the broad acceptance of the principles that have shaped the growth of REITs over the past six decades and work to ensure we remain a model to emulate across the corporate world.
One way to achieve that is to be up-to-date on the latest best practices and developments in REIT finance, law, and accounting. After two years of highly successful virtual conferences, Nareit will host REITwise in person this month in Orlando, Florida. It will be a welcome opportunity to renew old connections and for new ones to be made. It is a hopeful sign that things are moving in the right direction and proof that the REIT industry stands prepared for continued domestic and global growth.
2022 Nareit Chair
President & CEO
Equity Lifestyle Properties, Inc.