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Global Real Estate Review: New REITs Provide New Opportunities

Global Real Estate Review: New REITs Provide New Opportunities

European real estate investment showed average returns exceeding 200% over the past five years, compared to just under 20% average returns on all global mutual fund investments for the same period.
By Phillip Silitschanu

Boston, MA, May 2, 2007 – A new report from Aite Group, LLC outlines the different real estate investment options and structures available around the world, the real estate market in general, and the investment opportunities real estate offers investors at present. It provides a breakdown of the current environment for real estate investment vehicles in major countries in Europe and Asia.

Real Estate Investment Trust (REIT) and REIT-like investment vehicles are gaining steam in Europe and Asia, where returns on real estate investment have far outpaced the global equity and bond markets in recent years. In the past few months, in particular, investors have been showing interest in these funds as a means to participate in the real estate boom, and in some cases, as governments have introduced new schemes and the advantages of such funds have become evident. Although Europe has seen a boom in real estate, there may still be room for growth in the area of real estate investment. Europe has approximately 40% of the entire world's commercial property, but only accounts for 20% of property held under publicly listed companies. In the next four to seven years, nearly €150 billion of property in Europe could be moved into publicly listed funds. A similar situation is expected in Asia.

"Real estate around the world has seen a resurgence in its popularity, driven by lower interest rates and investors looking for better opportunities in a post tech-bubble market," said Phillip Silitschanu, senior analyst at Aite Group. "Governments have stepped in to help introduce new legislation to support the development of real estate investment schemes. In some cases, this legislation has been quite successful, while in others, it has made REIT structures so cumbersome they have been slow to take off."

This 37-page Impact Report contains 25 figures and tables. Clients of Aite Group's Wealth Management and Institutional Securities & Investments services can download the report.