ABSTRACT
This chapter examines the evolution of the global real estate investment trusts (REIT) market, what is deemed to be best current market practice and how the market is expected to change going forward. It focuses on the following contextual issues in international REITs: a rising risk-free rate; maturity of sector awareness; introduction of MiFID II; increased use of passive products, such as ETFs; and continued demand for "non-correlated" asset classes. The issues also include requirements for increasing maintenance capex to maintain values; a structural change in the perception of shopping centre and office assets; a blurring of the distinction between companies and funds; and increased focus on solutions and specific investment characteristics rather than generic sector allocations. REITs distribute most of their rental income cash flows as dividends, so gaining favour with investors seeking income and capital value growth in the prevailing low interest rate environment.
