FEBRUARY 2022

Global REIT Approach

to Real Estate Investing
Supporting Communities, Building Economies,
and Increasing Investment Around the World

Prepared by Nareit
REIT.com
As the worldwide representative voice for real estate investment trusts (REITs) and listed real estate
with an interest in U.S. real estate and capital markets, Nareit has long advocated for REIT regimes
around the world.

This study summarizes the dramatic growth of REITs around the world since their inception more than
60 years ago and the benefits of the REIT model for communities, economies, and investors. There are
currently 41 countries and regions, accounting for 85% of global GDP with a combined population of
nearly 5 billion people, that have enacted REIT legislation.

As the world becomes increasingly connected, and as nations seek to create, modernize, and
maintain the built environment in which we live and work, we see REITs as an indispensable resource to
efficiently channel capital to real estate in a manner that encourages market discipline and broadens
real estate ownership.

We hope this study will be useful for REITs and real estate companies, investors, and, in particular,
policymakers globally. Nareit looks forward to engaging in and supporting efforts to continue to grow
and improve the REIT model globally. We encourage you to use the resources on REIT.com to learn
more about REITs around the world and connect with Nareit to discuss how we can help support REIT
development in your nation or region.

Steve Wechsler John Worth

President & CEO Executive Vice President, Research & Investor Outreach
Nareit Nareit
 Contents

Contents
Introduction 3
n What is a REIT? 4

Global REIT Adoption 5

Benefits of REITs 8
n Communities 8
n Economic Growth, Job Creation, and Training 8
n Environmental Stewardship, Social Responsibility, 9
and Good Governance (ESG)
n Economies 10
n Early Movers in Enabling the Changing Economy 10
n Access to Capital Leads to Capital Markets Stability 10
n Investors 12
n Characteristics of REIT-Based Real Estate Investment 12

Conclusion 15

This document defines what a REIT is and provides background on the global adoption of
REITs; explains the types of real estate that REITs own today; and shares the benefits of a
REIT-based approach to real estate investing for communities, economies, and investors.
Dollars referenced in this report are in U.S. dollars ($).

© 2022 Nareit. All rights reserved.

Nareit serves as the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate. Nareit’s members are REITs and
other real estate companies throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who
advise, study, and service those businesses.

This document is intended for general informational purposes only, and is not intended to provide, and should not be relied on for, investment, tax, legal or
accounting advice. Investors are advised to consult their own professional advisors before engaging in any transaction. Nothing contained herein constitutes a
solicitation, recommendation, endorsement, or offer by Nareit, or any third party, to buy or sell securities or other financial instruments in this or in in any other
jurisdiction. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction where such distribution would be contrary to
local law or regulation.

REIT performance results are provided only as a barometer or measure of past performance, and future values will fluctuate from those used in the underlying
data. Any investment returns or performance data (past, hypothetical or otherwise) shown herein or in such data are not necessarily indicative of future returns
or performance.
2
 Introduction

Introduction
N
ations around the world have adopted real The REIT approach to commercial real estate investment:
estate investment trusts (REITs) as part of
their economic development strategies. REITs n Provides disciplined, market-based financing of real estate;
provide an investment opportunity, like a mutual n Offers access to global and domestic sources of capital,
fund, that makes it possible for everyday reducing the cost of capital for developing real estate to house
investors to benefit or enjoy returns from real the changing economy (In 2021, REITs around the world raised
estate and real estate-related projects by buying shares directly or more than $174 billion in equity and debt.);
accessing them through retirement or pension funds. n Encourages equity financing of real estate, increasing stability,

and reducing the risk of real estate crises; and,

REITs are companies that own, operate, or finance income- n Gives individual investors access to real estate investment

producing real estate. REITs are often listed on stock exchanges to help build financial security, manage wealth, and save for
like other public corporations. retirement.

Since REITs were first introduced in the United States (U.S.) in Investors in REITs receive returns that are highly correlated with
1960, 41 countries and regions, with a total population of nearly 5 other types of commercial real estate. REITs historically have
billion people and comprising 85% of global GDP, have authorized provided investors all over the world with regular income streams,
REITs. REITs have become a key part of commercial real estate portfolio diversification, and long-term capital appreciation,
investment around the world. largely attributable to long-term investment in, or financing of—
professionally-managed real estate. Because they are often stock-
Today, there are 865 listed REITs operating around the globe. Since market listed companies, REITs are easy to buy and sell and, unlike
1990, the equity market capitalization of listed REITs has grown other forms of commercial real estate, are accessible to people
from about $10 billion to more than $2.5 trillion at the end of 2021. across a greater range of income levels. REIT investors can easily
construct real estate portfolios that are diversified across different
REITs help enhance communities by: types of properties and geography.

n Harnessing private resources to help people around the world As the global population grows and urbanization accelerates,
use real estate to live, work, play, and interact with each other; nations need to bring in new sources of capital to construct and
n Creating jobs, better infrastructure, and increased economic maintain the built environment. REITs are an important tool that
activity; can provide access to local and global capital, provide market
n Providing access to global investment capital; and, stability, and open up real estate ownership to a nation’s broad
n Encouraging broad-based domestic ownership of commercial population.
real estate and critical infrastructure.
Global REITs by the Numbers
When REITs invest, the benefits can be seen and experienced far
and wide by communities and the people in them.

41
Number of countries and
regions with REITs

Outperformed International
Total number of 1989: 120
Stocks and Bonds listed REITs globally
(compound annual growth rate, 2021: 865
June 2009-December 2021)
13.00%
Equity market cap 1989: $11.7B
for listed REITs 2021: $2.5T
8.10%
7.41%
2.73%
$174B (in 2021)
REITs
Private Capital Raising
Bonds Real Estate Stocks
Nareit analysis of monthly returns for FTSE EPRA Nareit Global REITs Extended Index Nareit; Equity market capitalization and count for U.S. listed equity and mortgage
June 2009-December 2021 via FTSE and Factset and MSCI EAFE and Bloomberg REITs from FTSE Nareit All REITs Index; Equity market capitalization and count for
Barclays Global-Aggregate via Factset. Quarterly returns for NCREIF Global Real Estate companies listed as equity or mortgage REITs in S&P Global Capital IQ in in coun-
Fund Index (GREFI) as of 2021:Q3. tries and regions with REITs; Global capital raising via Capital IQ Pro (as of 2021).

Global REIT Approach to Real Estate Investing | 3

 Introduction

What is a REIT?
A REIT, or real estate investment trust, is a company that
owns, operates, or finances income-producing real estate.

REITs help house national economies by providing much

of the real estate where people live, work, shop, and spend
their leisure time—from the houses and apartments in
which they reside to the shopping centers they frequent
to the offices where they work—and REITs enable today’s
digital economy and communication with real estate such
as communications towers, data centers, and logistics
facilities.

REITs generally possess the following four distinguishing

characteristics:

n They are widely-held;

n They invest mostly in real estate, and/or earn most
income from real estate assets;
n They distribute most of their income to shareholders;
and,
n They are subject to a single level of taxation at the
shareholder level, effected by either allowing the entity
a deduction attributable to distributed dividends or
exempting such income from taxation at the entity
level.

Global REIT Approach to Real Estate Investing | 4

 Global REIT Adoption

Global REIT Adoption

T
he first authorization of a REIT structure took

REITs AROUND
place in the U.S. in 1960, which created a way
to make commercial real estate accessible to
all Americans in the same way they had been THE WORLD
able to invest in the stocks and bonds of many
companies.
Countries and Regions with REITs
Over the course of the following 60-plus years, the U.S. REIT
model has encouraged broad-based real estate investment.
Today, 145 million Americans, or 44% of American households, 1960 United States 2007 Germany
have REIT investments. 1969 Netherlands 2007 Italy
1969 New Zealand 2007 United Kingdom
REITs have also been established around the world to accomplish
a similar goal of developing a way to make investment in 1969 Taiwan 2008 Pakistan
diversified, income-producing real estate accessible to a variety 1971 Australia 2009 Costa Rica
of investors. 1993 Brazil 2009 Finland
As the map on page 6 demonstrates, as of 2021, a total of 41 1993 Canada 2009 Spain
countries and regions have adopted REITs, including all of the 1995 Belgium 2010 Mexico
G-7 countries. More than half of the Organisation for Economic 1995 Turkey 2010 Philippines
Co-operation and Development (OECD) countries have REITs in
place. 1999 Greece 2011 Hungary
1999 Singapore 2013 Ireland
While the REIT approach to real estate investment has been 2000 Japan 2013 South Africa
refined and enhanced over the years, the original intent of
inclusivity remains at the core of the REIT model. 2001 South Korea 2014 India
2003 France 2014 Kenya
The global REIT industry today includes companies engaged in 2003 Hong Kong 2015 Bahrain
real estate ownership or financing that support nearly all sectors
of the economy. 2005 Bulgaria 2015 Vietnam
2005 Malaysia 2016 Saudi Arabia
REITs own, operate, and/or finance apartment buildings, data 2005 Thailand 2018 Oman
centers, health care facilities, logistics facilities, office buildings,
rental housing, retail and shopping malls, self-storage centers, 2006 Dubai, UAE 2019 Portugal
communications towers, timberlands, and many other types of 2006 Israel 2020 Sri Lanka
properties. 2021 China

Global REIT Approach to Real Estate Investing | 5

 Global REIT Adoption

REITsAROUND
Around the WorldCountries
60 years of growth
REITs 60 years of growth
Countries and regions with REITs
and regions with REIT regimes
THE WORLD

Finland

Netherlands

Belgium
UK
Germany
Ireland
Hungary
Canada
France Bulgaria

Spain Turkey
Pakistan
China
Portugal
United States Israel
Italy

Greece Hong Kong Japan

Thailand
South Korea

Bahrain
Mexico
Dubai Taiwan
India
Oman
Costa Rica Vietnam
Saudi Arabia Philippines
Sri Lanka

Malaysia
Kenya
Singapore

Brazil

New Zealand

South Africa Australia

1960–1979 1960–1999 1960–2021

REIT Growth Over Time

No REITs 1960–1979 1980–1999 2000–2021

Number of Listed REITs: 1990 to 2021

1000

A total of 865 listed REITs with a combined 900 Legend 865

equity market capitalization of approximately
$2.5 trillion (as of December 2021) are in 800
North Pacific Europe Asia South Middle Africa
operation around the world. As the following
700
America America East
671
charts show, REITs have grown dramatically in
both number and equity market capitalization
600
over the past 30 years going from 120 listed
REITs in two countries to 865 listed REITs in 500
41 countries and regions. 407
400
337
In particular, Asia has had strong uptake of 257
REITs, growing from 31 REITs in six countries 300 242
and regions in 2005 to 216 REITs in 11
200
countries and regions in 2021. The Middle 120
East also has demonstrated meaningful 100
growth since 2015 with the addition of REITs
in Saudi Arabia and Oman. 0
December December December December December December December
1990 1995 2000 2005 2010 2015 2021

Source: Count of U.S. listed equity and mortgage REITs from FTSE Nareit All REITs Index and companies listed as
equity or mortgage REITs in S&P Global Capital IQ in REIT countries and regions.

Global REIT Approach to Real Estate Investing | 6

 Global REIT Adoption

Population of REIT
Billions Countries and Regions:
5 1990 to 2020

0
1990 1995 2000 2005 2010 2015 2020
Source: World Bank, World Development Indicators. Taiwan population via United Nations,
Department of Economic and Social Affairs, Population Division (2020).

GDP Share of REIT

100%
Countries and Regions:
90% 1990 to 2020
80%

70%

60%

50%
Market capitalization for REITs has increased steadily around
40% the world with the largest growth in North America from $8.7
30% billion in 1990 to $1.8 trillion in 2021. This growth is a testament
to the success and durability of the REIT approach.
20%

10% As the REIT model has spread globally, current countries

and regions with REITs represent 85% of 2020 global GDP,
0%
1990 1995 2000 2005 2010 2015 2019 2020 increasing from 28% of global GDP in 1990. The GDP of REIT
Source: World Bank, World Development Indicators. Taiwan GDP estimated from International
Monetary Fund, International Financial Statistics and Federal Reserve Economic Data. countries and regions has increased from $6.5 billion to almost
$72 trillion in this time frame.

REIT Market Capitalization: In 1990, REIT countries and regions had just a 6% share of
2.50 Trillions 1990 to 2021 global population, and currently, they account for 64% of
the world’s 2020 population. Asia has driven the growth in
2.00 population for REIT countries and regions, most notably with
the adoption of REITs in India in 2014 and China in 2021.
1.50
The decades-long evolution of REITs has yielded a number of
common features that point to a successful REIT regime:
1.00
n Flexibility of property type eligibility – REITs have been
0.50 innovators and early adopters in owning and operating the
commercial real estate that houses the modern economy.
n Flexibility in management – Allow internal or external man-
0.00
December December December December December December December agement; avoid limits on leverage and ownership restric-
1990 1995 2000 2005 2010 2015 2021 tions on how REITs operate.
Source: Equity market capitalization for U.S. listed equity and mortgage REITs from FTSE Nareit All
n Flexibility in structure – Allow listed, non-listed, public, and
REITs Index, equity market capitalization for companies listed as equity or mortgage REITs in S&P
Global Capital IQ in REIT countries and regions. private REITs. These are all tools REITs use.
n Flexibility in property transfers – Allow properties to enter
Legend
REITs without incurring a taxable event.
n Simplicity – Permit flexible and simple structures (rather

North Pacific Europe Asia South Middle Africa than requiring multi-tier structures).
America America East

Global REIT Approach to Real Estate Investing | 7

 Benefits of REITs: Communities

Benefits of REITs:
Communities

Commercial real estate is a critical part of Economic Growth, Job REITs employ analysts, property
the economy and plays a significant role managers, sustainability managers, and
in communities.
Creation, and Training human resources professionals, among
Globally, REITs are responsible for others. REITs that operate their own
Through the diverse array of properties significant tax revenue generated both buildings may also directly employ roles
they own, finance, and operate, REITs at the shareholder level where taxes such as maintenance, custodial services,
help provide the essential real estate are imposed and with respect to other food services, and others. For example,
that support neighborhoods, enable aspects of their business, including in the U.S. in 2020, REITs supported an
the digital economy, power community employment taxes, VAT, and property estimated 2.9 million full-time equivalent
essential services, and build the taxes. jobs, with REITs employing 308,000 full-
infrastructure of tomorrow, while creating time equivalent employees directly.
jobs and economic activity along the way. REIT economic activity supports
employment and economic growth In addition to supporting job creation,
through the people they employ directly many REITs have initiated social
as well as the goods and services they programs that focus on job training
purchase from others, the structures they and career development within their
develop and build and purchase from respective sectors to help their
others, and the dividends and interest customers build talent pipelines, while
they pay out to investors. reinforcing career pathways and creating
economic opportunity in the communities
where they operate.

Global REIT Approach to Real Estate Investing | 8

 Benefits of REITs: Communities

100
2021 GRESB ESG Scores
95
Listed
90
Private
85

80

75

70

65

60

55

50
Overall Score
Source: GRESB, 2021 equally-weighted scores based on data submitted
by companies.

Environmental Stewardship, Social Responsibility, and Good Governance (ESG)

REITs and their stakeholders are increasingly recognizing the importance of ESG efforts. REITs and listed real estate outperformed
privately owned and operated real estate in the 2021 GRESB ESG scores. Listed real estate edged out private real estate in all
three ESG categories and by six points overall as shown in the chart above. REITs understand that they contribute to and affect
meaningful change in their communities, regions, and countries through the ESG activities they undertake and the metrics they
establish, report, and achieve.

Environmental Stewardship Social Responsibility Good Governance

Environmental stewardship has long As developers, owners, and operators REITs have a long history of good
been a focus area for the REIT industry, of the built spaces which the full range governance practices. In many global
with investments in energy-saving and of communities and societies use every REIT regimes, by law, REITs must
waste-mitigating technology, sustainable day, the REIT industry has increasingly distribute most of their taxable income.
building materials, and responsible been focused on its social responsibility Because there is limited opportunity to
environmental management processes practices. There have been a variety of retain earnings, management is more
prioritized by a large portion of the impactful and innovative partnerships likely to be efficient with available funds,
industry. In recent years, many REITs and programs introduced that address shareholders have greater control over
began tracking the impact of these customer needs, engage employees, and earnings, and management objectives
environmental efforts, and have found promote community well-being. Yet, there align with shareholder interests.
significant cost savings, solid tenant is much more work to be done, both in
and community engagement, strong terms of effective, transparent reporting Public REITs, unlike private real estate
executive and board commitment, and and community engagement, especially investments, can only raise additional
effective risk management to be some of with respect to advancing diversity, equity, capital in the public capital markets
the lasting, value-added benefits. and inclusion in the REIT and real estate by disclosing financial information to
investment industry. investors and reporting on material
business developments and risks,
allowing investors to analyze and value
REIT stocks independently. This scrutiny
provides a measure of protection
and more than one barometer of any
REIT’s financial condition. In addition,
being subject to a particular country’s
or region’s securities laws typically
requires regular disclosures to the public,
including quarterly and yearly financial
reports.

Global REIT Approach to Real Estate Investing | 9

 Benefits of REITs: Economies

Benefits of REITs:
Economies

Early Movers in Enabling Access to Capital Leads to assets, providing funding to property
the Changing Economy Capital Markets Stability owners, and diversifying investment
opportunities for all investors, while
REITs have been real estate innovators Accessing global capital markets — simultaneously reducing systemic risk.
for decades. One of the most important REITs provide a channel to access global
innovations was creating an effective capital. Reducing the dependency of the real
alignment of interests between REIT estate sector on shadow banking
managers and investors through Increasing efficiency and liquidity in — REITs provide equity financing, and
permanent capital, dividend payouts, and the local real estate market — REITs many trade on securities exchanges and
a corporate governance structure.
provide integration between real estate must disclose financial performance
and capital markets, contributing to more information, thereby increasing
REITs have also consistently been early efficient capital allocation. transparency and management
movers in bringing institutional capital accountability.
into new and emerging areas of real Increasing transparency to promote
estate. Some of the innovative sectors stability in the local real estate market Providing broad accessibility to the
REITs spearheaded have included self- — REITs are an effective way to increase benefits of real estate investment
storage, health care, hotels and lodging, market transparency and provide market- — REIT-based real estate investment
billboards, and timber. based pricing signals to help govern real will provide all local investors, including
estate development more effectively. small investors, access to the long-term
With technology at the forefront of REITs can also promote financial stability. benefits of investing in real estate for
many innovations within the economy, Research makes the case that REITs building wealth and financial security.
REITs have led the way in housing helped limit a property price bubble in Pensions, endowments, and other
the digital economy in data centers, commercial real estate in the run up to institutional investors around the world
communications towers, and industrial the Great Financial Crisis.1 increasingly use REITs as part of their real
and logistics facilities. estate allocation.
Promoting securitization — Asset
REITs are continuing to innovate by securitization provides businesses with
embracing emerging property types like an additional channel for financing and
life science and laboratory space, cold can effectively move credit risk off bank
storage, single family rentals, casinos and balance sheets. REITs are a reliable
gaming, and others. and transparent method for securitizing

Global REIT Approach to Real Estate Investing | 10

 Benefits of REITs: Economies

Property Sector Market Cap Lodging/Resorts

2010 2% 2021
Self-storage Specialty Timber
Lodging/Resorts 2% Specialty
3% 2%
3% 1%
Self-storage
5%
Industrial
4% Data Centers
5% Diversified
18%
Health Care
6%
Health Care
Diversified 6%
Residential 36%
10%
Residential
Office 16%
8%
Office
14%
Infrastructure
10%
Industrial
Retail Retail 14%
22% 11%

Note: Industrial includes industrial and industrial/office mixed. Source: FTSE EPRA/Nareit Global equity market capitalization by property sector as of Dec. 31, 2010 and FTSE EPRA/Nareit Global
Extended Index equity market capitalization of property sectors as of Dec. 31, 2021.

These charts show the change in market capitalization of various real estate sectors between 2010 and 2021.

As a result of the evolving economy over the past 10 years, Infrastructure REITs own communications towers and fiber
there have been dramatic changes in the composition of REIT that house the equipment to transmit voice and data messages
equity market capitalization. REITs have been on the forefront and allow information to flow among devices around the world.
of owning and operating the real estate that houses the digital
economy. Data Center REITs own facilities that house the servers that
help link data communications, store data, and maintain the
n In 2010, industrial REITs accounted for just 4% of total equity internet.
REIT market cap, communications towers had not been
introduced into the index series, and data centers were not Industrial REITs own the logistics facilities that play a crucial
broken out into a stand-alone sector. role in e-commerce and cold storage. Temperature-controlled
facilities maintain the quality of products, including electronics,
n In 2021, the infrastructure, data center, and industrial sectors frozen and fresh perishable grocery items, and medical supplies
accounted for 30% of equity REIT market cap. ahead of delivery.

Global REIT Approach to Real Estate Investing | 11

 Benefits of REITs: Investors

Benefits of REITs:
Investors

Commercial real estate is a fundamental The growth in size and importance of real Characteristics of
asset class, and REITs are a low cost, estate, primarily equity REITs, resulted REIT-Based Real Estate
effective, and liquid means of investing in a new real estate sector classification
in real estate. REIT investment helps by S&P Dow Jones Indices and MSCI
Investment
to build diversified portfolios that in their Global Industry Classification The REIT approach to real estate
cover the entire breadth of investment Standard (GICS®) in 2016. Similarly, in investing provides investors with a
markets, and commercial real estate has 2019, FTSE Russell added the real estate straightforward and transparent means to
historically brought unique attributes to a sector within its Industry Classification access the real estate asset class.
portfolio, including: Benchmark (ICB®). With these
n A distinct economic cycle relative to classifications, investors, managers, and Performance — The real estate market
most other stocks and bonds; advisors are encouraged to more actively is the primary driver of REIT returns;
n Potential inflation protection; and, consider real estate—especially REITs— therefore, REITs may be used as a liquid
n Reliable income returns. when developing investment policies and proxy for gaining access to the entire
portfolios. commercial real estate asset class.
REITs historically have delivered
competitive total returns based on high,
steady dividend income and long-term
capital appreciation. Their comparatively
low correlation with other assets also
makes them an excellent portfolio
diversifier that can help reduce overall
portfolio risk and increase returns.

Global REIT Approach to Real Estate Investing | 12

 Benefits of REITs: Investors

Total
Total Returns:Stocks,
Returns: Stocks,Bonds,
Bonds, and
andPrivate
Privateand
andPublic
PublicReal Estate
Real Estate
350
FTSE EPRA Nareit Global Index

FTSE EPRA Nareit Global Extended Index

300
MSCI EAFE (Stocks)

NCREIF GREFI (Private Real Estate)

250
Bloomberg Barclays Global-Aggregate (Bonds)

200

150

100

50
Aug-05

Aug-06

Aug-07

Aug-08

Aug-09

Aug-10

Aug-11

Aug-12

Aug-13

Aug-14

Aug-15

Aug-16

Aug-17

Aug-18

Aug-19

Aug-20

Aug-21
Fe b-05

Fe b-06

Fe b-07

Fe b-08

Fe b-09

Fe b-10

Fe b-11

Fe b-12

Fe b-13

Fe b-14

Fe b-15

Fe b-16

Fe b-17

Fe b-18

Fe b-19

Fe b-20

Fe b-21
Source: Nareit analysis of monthly returns for FTSE EPRA Nareit Global Index February 2005-April 2011 and FTSE EPRA Nareit Global Extended Index May 2011-December 2021 via FTSE and Factset and MSCI EAFE and Bloomberg Barclays
Source: Nareit
Global-Aggregate analysis
via Factset. of monthly
Quarterly returns returns
for NCREIF forEstate
Global Real FTSE Fund EPRA Nareit
Index (GREFI) Global Index February 2005-April 2011 and FTSE EPRA Nareit Global Extended
until 2021:Q3.

Index May 2011-December 2021 via FTSE and Factset and MSCI EAFE and Bloomberg Barclays Global-Aggregate via Factset. Quarterly returns for
NCREIF Global Real Estate Fund Index (GREFI) until 2021:Q3.

As the chart shows, over the long term, As of Dec. 31, 2021, the FTSE EPRA/ The chart on page 14 illustrates the low
global listed real estate, including REITs, Nareit Global Extended Index, the correlation REITs have had with the broad
has generally outperformed both global broadest index of global stock exchange- stock market.
stocks and global bonds. The compound listed REITs and property companies in
annual growth rate in returns from both developed and emerging countries Liquidity — REITs are bought and sold
February 2005 to December 2021 is and regions, included 537 constituents like other stocks, mutual funds, and ETFs.
6.9% for the FTSE EPRA/Nareit Global with a combined float-adjusted equity
Index, compared with 5.8% for the market capitalization of $2.6 trillion. Dividends — REITs have provided reliable
broader global stock market (represented REITs represented 83% of that market income returns.4 The dividend yield for
by MSCI EAFE), 5.4% for private real capitalization. the FTSE EPRA/Nareit Global REITs Index
estate (NCREIF’s Global Real Estate for Dec. 31, 2021 was 3.15 versus 2.51 for
Index through September 2021), and 3.1% Diversification — REITs have had low MSCI EAFE.
for global bonds (Bloomberg Barclays correlation with other stocks and bonds,2
Global-Aggregate bond index). with FTSE EPRA/Nareit Global REITs Inflation Protection — Due in part to
Extended Index having a 0.79 correlation the fact that many leases are tied to
Within global real estate, REITs have with MSCI EAFE.3 inflation and that real estate values have
outperformed other listed real estate tended to increase in response to rising
companies. From June 2009, average Over the past few decades, assets replacement costs, REITs have provided
annual growth for the FTSE EPRA/Nareit have become increasingly correlated. natural protection against inflation,
Global REITs Extended Index is 13.0% Fortunately, REITs provide access to and their dividends delivered a reliable
during that same period. meaningful diversification opportunities. stream of income even during inflationary
periods.

Global REIT Approach to Real Estate Investing | 13

 Benefits of REITs: Investors

Correlation with Global Total Stock Market Total Monthly Returns

1.0

0.9

0.8

0.7

0.6

0.5
Large Cap Mid Cap Small Cap Growth Value REITs

Source: Monthly total returns for MSCI EAFE Indexes and FTSE EPRA/Nareit Global REITs Extended Index from June 2009 to December 2021.

Global REIT Approach to Real Estate Investing | 14

 Conclusion

Conclusion

T
he REIT approach to real estate investing
supports communities, builds economies, and
increases investment around the world. REIT
investors can construct real estate portfolios
that are diversified across different types of
properties and geography.

REITs help promote development and investment in commercial

real estate and infrastructure; provide access to global investment
capital; and encourage broad-based domestic ownership of
commercial real estate.

For data cited in this report unless otherwise noted,

or to access additional REIT news, research,
market trends, or analysis, visit

REIT.com
All information unless otherwise cited is from REIT.com
1 Packer, F., T.J. Riddiough, and Shek. “Securitization and the Supply Cycle: Evidence from the REIT
Market.” The Journal of Portfolio Management, Special Real Estate Issue 2013, pp. 134-143.
2 CEM Benchmarking 2020 available at www.reit.com/data-research/research/updated-cem-
benchmarking-study-highlights-reit-performance.
3 Source: Nareit analysis of monthly returns from FTSE EPRA Nareit Global REITs Index July 31,
2009 to Dec. 31, 2021 via FTSE and Factset and MSCI EAFE via Factset.
4 Nareit sponsored study by Wilshire Funds Management – Income Oriented Portfolios –
Challenges and Solutions, October 2016.

Global REIT Approach to Real Estate Investing | 15