Dutch Broker Launches Global REIT Index

by Ulrika Lomas, Tax-News.com, Brussels

06 August 2004

An Amsterdam-based broker has launched the world’s first global index to track the performance of real estate investment trusts (REITs), tax efficient property vehicles that have become increasingly popular in recent years for their consistent returns.

The income of a REIT is untaxed at the level of the trust provided that most of its income (typically 80% to 100%, depending on the jurisdiction) is distributed to its shareholders, who are then responsible for tax in the normal way.

They have generally outperformed returns from equity investment over the last decade, and the trusts usually generate higher income and cash-flows than traditional real estate companies.

The GPR 250 REIT index launched by Global Property Research, part of Dutch broker Kempen & Co, is derived from the long-standing GPR 250 index, which tracks the 250 most liquid property stocks in the world.

The new index consists of 122 companies from North America, 14 from Europe, 9 from Asia, 20 from Oceania and 2 from Africa, with a total free market capitalisation of $262 billion.

"The global REIT market is rapidly expanding in Asia and Europe at the moment,” GPR observed, adding:

“As the number of companies that qualify as REITs is growing, the global REIT market will be considered as a separate asset class, different from the listed property sector as a whole."

The index is calculated in local currencies, euros and US dollars, and is available on a daily basis.

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