International REITs

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According to FTSE EPRA/NAREIT at the end of July 2012, the global real estate securities market consisted of 20 countries in developed markets (286 companies) and of 17 countries in emerging markets (126 publicly traded equity REITs and listed property companies). Geographically, REIT and real estate securities markets are spread across the Americas, Europe, the Middle East, Africa, and Asia. [1] For a U.S. domiciled investor, international REITS make up the global market ex U.S securities. The U.S. securitized real estate market makes up roughly one third of the capitalization of the global market.

National REIT markets

The global reach of REITs Russell Advisors, graph source ING September 2010. Nations finalizing the adoption of REIT structures since 2010 include Spain, Finland, Hungary, Israel, Dubai, South Africa, Pakistan, Philippines, and Mexico.

The United States, in 1960, was the first country to institute the REIT structure for holding commercial real estate. Australia created its REIT structure in 1971. Beginning in 2000 an increasing number of nations have legislated REIT structures. In international markets, especially emerging markets, a frequent vehicle for investing in commercial real estate is a Real Estate Operating Company (REOC). Whereas a REIT distributes earnings to shareholders, a REOC reinvests earnings into the business. [2] The table below provides a listing of nations now employing REIT structures for securitized real estate investment.

National REIT markets [1]
Country [note 1] Classification Local term Inception
Australia Developed A-REITs 1971
Belgium Developed SICAFI [note 2] 1995
Bulgaria Emerging SPIC [note 3] 2005
Brazil Emerging FII [note 4] 1993
Canada Developed REITs 1993
Chile Emerging FII [note 5] 2007
Costa Rica Emerging REIF [note 6] 2007
Dubai Emerging REITs 2006
Finland Developed Finnish REIT 2009
France Developed SIIC [note 7] 2003
Germany Developed G-REITs 2007
Greece Emerging REIC [note 8] 2007
Hong Kong Developed REITs 2003
Hungary Emerging 2011
Israel Developed REITs 2006
Italy Developed SIIQ [note 9] 2007
Japan Developed J-REITs 1999
Lithuania Emerging REITs 2008
Luxembourg Developed SIF [note 10] 2007
Malaysia Emerging REITs 2005
Mexico Emerging FIBRAS [note 11] 2010
Netherlands Developed FBI [note 12] 1969
New Zealand Developed NZ-REITs 1969
Pakistan Emerging Pakistan REITs 2008
Philippines Emerging 2010
Singapore Developed S-REITs 1999
Spain Developed SOCIM [note 13] 2009
South Africa Emerging PUT [note 14] 2013
South Korea Emerging K-REITs [note 15] 2001
Taiwan Emerging REITs 2003
Thailand Emerging REITs 2005
Turkey Emerging REITs [note 16] 1995
United Kingdom Developed UK REITs 2007
United States Developed REITs 1960

Role of international REITs in an investment portfolio

For portfolios that include an allocation to domestic real estate securities, the arguments for inclusion of international reits include:

  • Diversifying the risk of a single domestic real estate market by accessing a wider universe of real estate companies. This argument is similar to the basic argument for adding international stocks to a domestic stock portfolio. For U.S. investors, domestic real estate securities provide access to about one third of the global real estate markets.
  • International real estate markets exhibit lower correlations between regions, thus offering a potential diversification benefit. Vanguard research indicates that the rolling annual correlation between international reits and US reits (1990-2010, measured by S&P indexes) ranges from -0.4 to 0.85. [2] International reits also provide varying correlations with US stocks, US bonds, US cash, and international securities markets.
  • Wilshire argues that target retirement funds employing global real estate allocations should allocate between 7% to 15% of the portfolio to a global real estate index fund. [3]

Caveats regarding using an international REIT fund include the following.

  • If one is a total market investor, the international total market index funds hold the market capitalization of international real estate securities.
  • An international REIT fund creates an asset location issue due to the fact that international reits have comparatively high dividend distribution that is mostly taxed at marginal income tax rates. The expected high distributions, mostly non-qualified, suggest that international REITs are candidates for placement in tax-deferred or tax-free investment accounts. However, to the extent that income is taxed by local national governments, the fund's dividend distribution may qualify for a foreign tax credit, which is foregone if the fund is held in a tax-advantaged account. In sum, most foreign REIT index funds and ETFs have a foreign tax credit of only 5% of the dividend yield (see, for example, Vanguard Foreign Tax worksheets for Vanguard's fund); therefore, the high tax rate is the more important cost factor and the funds are better held in tax-advantaged accounts.

The table below provides returns data for the FTSE/EPRA NAREIT series of developed market real estate securities indexes. The global index includes the North American (US and Canada), European, and Asian indexes. For comparative purposes, the table includes these regional indexes, the US domestic reit index, and the global index. The blue colored cells indicate the highest performing index for each year; the red colored cells indicate the lowest performing index for each year. The second tab provides the income portion of each index's annual return.

FTSE/EPRA NAREIT developed market index returns [4]

(View Google Spreadsheet in browser, then File --> Download as to download the file.)
Note: If the spreadsheet is blank, select a different sheet, then back to that sheet. The image will be refreshed.

International REIT indices

The following index providers all have index tracking funds/ETFs linked to one or more of their indices:

Index Link Methodology
Dow Jones Real Estate Indexes link link
FTSE EPRA NAREIT Global Real Estate Index Series link link
S&P Property and REIT indices link link


Indexed exchange traded funds covering international REITS are provided by Ishares, State Street, Vanguard, and Wisdom Tree. Passively managed international REIT mutual funds are provided by DFA and Vanguard. Index mutual funds that track global real estate companies are provided by Index Trust and Northern Trust. [note 17]

See also


  1. Detailed reportage of each country's real estate securities legal structures and tax rules are made available at EPRA's REIT surveys at EPRA REIT Survey 2012.
  2. Belgium: SICAFI is an acronym for Société d’Investissement a Capital Fixe Immobilière.
  3. Bulgaria; SPIC is an acronym for Special Investment Purpose Companies.
  4. Brazil: FII is an acronym for Fundo de Investimento Imobiliário.
  5. Chile: FII is an acronym for Fondos de Inversion Inmobiliario.
  6. Costa Rica: REIF is an acronym for Real Estate Investment Fund; an REDIF is an acronym for a Real Estate Development Investment Fund.
  7. France: SIIC is an acronym for Société d'Investissements Immobiliers Cotée.
  8. Greece: REIC is an acronym for Real Estate Investment Company.
  9. Italy: SIIQ is an acronym for Società Di Investimento Immobiliare.
  10. Luxembourg: SIF is an acronym for Specialised Investment Fund.
  11. Mexico: FIBRAS is an acronym for Fideicomisos de Infraestructuras y Bienes Raices.
  12. Netherlands: FBI is an acronym for Fiscale Beleggingsinstelling.
  13. Spain: SOCIM is an acronym for Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario.
  14. South Africa: PUT is an acronym for Property Unit Trust.
  15. In South Korea REITs are known as K-REITs, P-REITs or CR-REIT .
  16. In Turkey REITs are labeled Gayrimenkul Yatirim Ortakligi.
  17. See Foreign Real Estate for mutual funds and ETFs covering the asset class.


  1. 1.0 1.1 Global REIT Chronology,
  2. 2.0 2.1 REITs: Effective exposure to commercial real estate?, Vanguard Institutional, 03/23/2011
  3. The Role of REITs and Listed Real Estate Equities in Target Date Fund Asset Allocations, Wilshire Associates, March 2012
  4. REIT Watch January 2013 issue,

Further reading



White papers
Academic papers

External links