Australia
The REIT concept was launched in Australia in 1971. General Property Trust was the first Australian real estate investment trust (LPT) on the Australian stock exchanges (now the Australian Securities Exchange). REITs which are listed on an exchange were known as Listed Property Trusts (LPTs) until March 2008, distinguishing them from private REITs which are known in Australia as Unlisted Property Trusts. They have since been renamed Australian Real Estate Investment Trusts (A-REITs) in line with international practice.[27]
REITs have shown numerous benefits over direct investment including lower tax rates and increased liquidity. There are now more than 70 A-REITs listed on the ASX, with market capitalization in excess of A$100bn.[27]
Australia is also receiving growing recognition as having the world's largest REITs market outside the United States. More than 12 percent of global listed property trusts can be found on the ASX.[28]
Hong Kong
REITs have been in existence in Hong Kong since 2005, when The Link REIT was launched by the Hong Kong Housing Authority on behalf of the Hong Kong Government. Since 2005, there have been seven REIT listings as at July 2007, most of which, including Sunlight REIT have not enjoyed success because of low yield. Except for The Link and Regal Real Estate Investment Trust, share prices of all but one are significantly below the initial public offering (IPO) price. Hong Kong issuers' use of financial engineering (interest rate swaps) to improve initial yields has also been cited as having reduced investors' interest.[29]
As of July 2012 there are nine REITs listed with a total market capitalisation of approximately €15 billion which amounts to almost 2% of the total global REIT market capitalisation. Two out of the nine listed REITs are also included in the EPRA index, an index published by the European Public Real Estate Association (EPRA). The current top five REITs in Hong Kong are The Link REIT with a total market capitalisation of €8 billion, Hui Xian REIT with a total market capitalisation of €2.3 billion, Champion REIT with a total market capitalisation of €1.8 billion, Fortune REIT with a total market capitalisation of €1 billion and with a total market capitalisation of €700 million.
India
As of August 2014, India approved creation of real estate investment trusts in the country.[31] Indian REITs (country specific/generic version I-REITs) will help individual investors enjoy the benefits of owning an interest in the securitised real estate market. The greatest benefit will be that of fast and easy liquidation of investments in the real estate market unlike the traditional way of disposing of real estate. The government and Securities and Exchange Board of India through various notifications is in the process of making it easier to invest in real estate in India directly and indirectly through foreign direct investment, through listed real estate companies and mutual funds. In the budget of 2014, finance minister Arun Jaitley has introduced a law for setting up of REITs.[32] As in 2021, there are three REITs listed in National Stock Exchange of India. These are Embassy, Mindspace and Brookfields. Overall, the shareholding of Indian REITs is skewed towards institutional investors (mostly FPIs), with very minimal contribution from retail investors.[33]
China
CSRC (China Securities Regulatory Commission) and NDRC (National Development and Reform Commission) jointly announced the start of pilot projects in REITs on April 30, 2020. This official announcement represents the beginning of REITs in mainland China.
As of March 14, 2024, the landscape of China's Real Estate Investment Trusts (REITs) saw a significant advancement with the listing of Huaxia Jinmao Commercial REITs (508017)[34] and Jiashi Wumei Consumer REITs (508011)[35] on the Shanghai Stock Exchange on March 12, followed by Huaxia China Resources Commercial REITs (180601)[36] on the Shenzhen Stock Exchange on March 14.
According to statistics from the Shanghai Stock Exchange, listing these two consumer infrastructure REITs has increased the total number of listed REITs to 23, with an issuance scale approaching 80 billion yuan.[37] The Shenzhen Stock Exchange has reported that the funds raised by infrastructure REITs successfully listed on their exchange have surpassed 32 billion yuan.
Japan
Japan permitted the establishment of REITs in December 2001. J-REIT securities are traded on the Tokyo Stock Exchange among other exchanges in Japan.[38]
A J-REIT (a listed real estate investment trust) is strictly regulated under the Law concerning Investment Trusts and Investment Companies (LITIC) and established as an investment company under the LITIC.[39]
In addition to REITs, Japanese law also provides for a parallel system of special purpose companies which can be used for the securitization of particular properties on the private placement basis. REIT shares targeted in 2016 accounted for 7 percent of the United States market, which were subsequently sold for less than half of the initial value at $31 billion.[40]
Malaysia
The Bursa Malaysia has 18 REIT listed with five Islamic REITS (shariah compliant – according to Islamic investment compliance).
Indonesia
Dana Investasi Real Estat Berbentuk Kontrak Investasi Kolektif (DIREs) have lacked popularity because of high sale tax and double taxation.[41] Until 2016, only one DIRE was established, which was in 2012. However, tax incentives plans demonstrate an intention of policymakers and lawmakers to boost the competitiveness of the market, and to encourage DIREs to be listed domestically.
Pakistan
REITs in Pakistan are regulated by the Securities & Exchange Commission of Pakistan (SECP) under 'Real Estate Investment Trust Regulations 2022'. Arif Habib Dolmen REIT Management Limited - AHDRML, became Pakistan's very first REIT management company in 2009. Subsequently, The Dolmen City REIT, a Shariah Compliant Rental REIT scheme, became the first REIT in Pakistan in 2015.[42] Right now AHDRML has 11 REITS under its umbrella operating successfully in Pakistan.[43]
The Securities and Exchange Commission of Pakistan expected that about six REITs would be licensed within the first year, mainly large asset management companies. Pakistan has seen an outflow of investments by foreign real estate development companies, mostly based in Malaysia and Dubai.[44]
SECP has issued licenses to four parties namely, Arif Habib REIT Management Company, AKD REIT Management Company, Eden Developers REIT Management Company and SB Global REIT Management Company.
Philippines
The legal framework enabling the establishment of REITs in the Philippines have been in place after the Real Estate Investment Trust Act of 2009 (Republic Act No. 9856) passed into law on December 17, 2009. Its Implementing Rules and Regulations were approved by the Securities and Exchange Commission in May 2010. However, it failed to attract investors due to its restrictive tax policies and high friction cost.[45]
Regulations on REITs was relaxed in January 2020[46] which led to the establishment of the first REIT in the country, AREIT Inc. of Ayala Land which had its public offering in August of the same year.[47] However foreign investors still have poor reception towards REITs during that year when there was also a prevailing COVID-19 pandemic.[46]
Singapore
Commonly referred to as S-REITs, there are more than 40 REITs listed on the Singapore Exchange,[48] with the latest REIT, Cromwell European REIT, listed on 30 November 2017. The first one to be set up being CapitaMall Trust[49] in July 2002. They represent a range of property sectors including retail, office, industrial, hospitality and residential. S-REITs hold a variety of properties in countries including Japan, China, Indonesia and Hong Kong, in addition to local properties.[50][51] In recent years, foreign assets listing on the Singapore Exchange has grown to overtake those traditional listing with local assets.
S-REITs are regulated as Collective Investment Schemes under the Monetary Authority of Singapore's Code on Collective Investment Schemes,[52]
Thailand
The Thai Securities and Exchange Commission created regulations to establish REITs as an investment vehicle in late 2012, opening the doors for the first REITs to be listed in 2013.[55] There are at least two tens of REITS.[56] Introduced in 2014 to replace the Property Funds for Public Offering (PFPO) scheme, REITs have gained popularity, and the total market capitalisation has reached THB 85 billion across two million square metres of assets.[57]
Sri Lanka
On 1 August 2020, the Securities and Exchange Commission of Sri Lanka (SEC) announced that REITS will be introduced as an extension of the current Unit Trust Code and the new Rules, which came into effect from 31 July 2020 is in the form of a Gazette Notification published by the SEC. These Rules which are comprehensive, will govern the setting up of and the conduct of a Sri Lankan REITs. Specific provisions have been included for the verification of title and valuation of property that will form part of the assets of the REIT. Amongst the requirements is the mandatory distribution of approximately 90% of income to the unit holders, which is currently not a requirement for any of the listed entities. Further, due to the availability of the tax pass through mechanism to Unit Trusts, REITs also could benefit to be a viable business concept to Sri Lanka that will open new horizons for entrepreneurs to take the real estate industry to greater heights.
