BDO Global put out a report that attempted to answer that question of what the future holds for the Global REIT sector. The REIT leaders canvassed for the report were confident that the listed real estate sector will continue to grow and to thrive.
In the longer term, there is a feeling that a more standardized global REIT regime could help the sector in both emerging and mature geographies. In the more immediate term, REIT leaders felt that there are changes afoot that could make the sector more appealing to generalist investors; and that in some jurisdictions the discount to net asset value at which many REITs are trading at this point in the cycle will lead to merger and acquisition activity.
The REIT sector has grown significantly in the last decade; both in terms of REITs being introduced in new countries, and in terms of an increase in the size of the sector in existing jurisdictions, the report said.
In Europe growth has been slower, but according to EPRA the market cap of the listed European real estate sector has grown by a third in the same period from €150bn to €200bn.
In Asia, the REIT sector has grown by almost two thirds, from $135 billion to $213 billion, according to data from Consilia Capital.
And there is confidence among those canvassed that this pattern will continue, the report said. “Slightly less than half of REIT leaders felt that the listed real estate sector will continue to grow in the next 12-24 months, with around a third feeling it will stay roughly the same size.”