ABSTRACT
This chapter identifies critical contextual issues in international real estate investment trusts (REITs), including the defining characteristics of REITs, the global evolution of REITs and the risk-return characteristics of real estate investment through REITs relative to non-REIT real estate investment. REITs obtain a special "tax-transparent" status in return for meeting certain obligations, most importantly high distribution requirements. Most of the REIT regimes are oriented towards the collective investment vehicle model although the specific structure depends on the legal framework in each country. The traditional investment focus of REITs is, as the name suggests, real estate. As an investment structure, REITs are incredibly dynamic. In the illiquid real estate market, however, the same new information – and the same effect on property values – will not become manifest until transactions are completed at the new prices. The chapter also presents an overview of the key concepts discussed in this book.
