The U.K. REIT market may be become more popular next year as a result of new regulations. The area may be popular with investors looking for a direct investment in property with the ability to generate income, according to Citywire.Under new regulations, new property companies will no longer need to be listed when they apply for REIT status and will have one-year grace periods during which they do not have to satisfy stringent income and asset tests.
Some of the REITs will be volatile because of the ability to trade freely in the shares. As with property company shares, Fidelity is arguing for investing via a mutual fund to spread the risk.
Investing in a mutual fund that invests in REITs means that not only is the investment spread across a number of different REITs, perhaps owning different types of property, but it can also be spread across countries.
REITs have been available in the U.S. since 1960 and over 20 countries already have or are proposing to introduce REIT-like structures. Listed on stock exchanges, REITs are a tax-efficient means of gaining a diversified exposure to commercial property. Fidelity estimates that the value of the global REITs market will grow by about 10% each year to exceed $1.3 trillion.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.