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Analysis Of The Global Market Capitalization Of Reits

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3.2. Development In a global context, the global market capitalisation of REITs stands at the US $1.7t by the year of 2016. Moreover, it has been reported that 66% percent of the global REIT market capitalisation could be found in the US by 2016 (EY, 2016). Whereas, the second largest group form by other countries such as Australia, Canada, France Germany, UK and other nations only account for a 33% (EY, 2016). Both groups have well established real estate markets with a significant domestic and international demand for real estate funds. However, the US market for REITs is the biggest one experiencing a growth of around 150% between eh period of 2010 to 2016. 3.3. US Real estate funds development (REITs) In general the real estate …show more content…

The modern REITs are formed by equity and at the time were considered growth stocks; the reason was because REITs were experiencing a tremendous growth in their market capitalisation from $9 billion to $128 billion since 1992 to 1997, due to major public initial public offerings (IPOs) secondary offerings happening at the time; in which equity REITs were the largest beneficiaries in raising capital (Investment Property Forum, 2009) (Kim, et al., 2002). The growth incited more pressure on private real estate companies with liquidity concerns, pushing them to recapitalise and others chose to go public and obtain the REIT status. 3.4. UK Real Estate Mutual funds Development (REITs) Contrary to the US, the UK had no formal REITs structure in operations until 2007. Therefore, prior 2007 there was no property investment vehicle which would be exempt from tax which was a poorly seen and deterred some investors from the market. The majority of property companies in the UK at the time had major constraints as the tax was being imposed on income and capital gains (European Public Real Estate Association, 2016) (EY, 2016) (European Public Real Estate Association, 2016) (Investment Property Forum, 2009). Also, private or institutional investors had little possibilities of directly owning real estate or investing in other real estate companies. In the UK,

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