While the global merchandise as a whole has grown some regions have fared better than others the inform says. Over the past 12 months the largest Reit merchandise in the world the US has lost almost a quarter of its real estate investment trusts through mergers and acquisitions.'We've seen a dramatic alter in Reit formation away from North America and toward Asia and Europe in the past 12 months,' says Michael Frankel global director of Reit services at Ernst & Young.'While a number of quite large North American Reits undergo been taken private in the past year we've seen a tremendous outpouring of capital in Asia and Europe where Reit regimes in the UK and Turkey have helped the rest of the world beat the US for the first time in the total number of Reits.'Frankel believes other maturing markets around the world such as Australia. Canada and the Netherlands may witness a similar gesticulate of Reits being taken private in the year ahead albeit on a lesser measure because of tax considerations in some countries and the higher be of public capital. Two large Australian Reits have already been delisted following private deals. In 2006 according to Bloomberg. North America accounted for 253 Reits compared with 198 elsewhere in the world. By June this year however the rest of the world had 253 Reits compared with 195 in North America although the US remains the largest hit merchandise with 169. Ed Psaltis the inform's compose and a member of Ernst & Young Australia's transaction advisory services group points to the impact of recent or pending Reit legislation in three major European real estate markets the UK. Germany and Italy which is just beginning to furnish growth in Reits.'Moving into 2008 we expect to see a much more stable Reit market in the UK as more investors change state educated about the and with Germany's legislation now taking effect and Italy coming on board next year the potential exists for Euro-Reits to really take off,' Psaltis says. The report also points to rising levels of debt among Reits globally the prove of low interest rates in many markets. Only Turkey has interest rates high enough to dissuade Reits from boosting debt levels this year. Across the 15 markets analysed add up debt levels grew by about 6 per cent to 40.29 per cent up from 34.24 per cent 12 months earlier. Based on this debt level the report estimates that the total value of real estate owned by Reits globally now stands at USD1.27trn. However it also notes that as a result of the fallout from the sub-prime residential mortgage merchandise change. Reits looking to refinance in the coming year are likely to approach tighter covenants and increased financing costs both of which ordain have a contradict impact on real estate values and s. Ernst & Young's second annual report analyses markets in countries where real estate investment trusts are publicly traded including Australia. Belgium. Canada. Japan. Netherlands. New Zealand. Singapore. South Korea and the US as well as the relatively new market of the UK. Ernst & Young adjudged Singapore to be the best performing Reit merchandise with a be of 72.92 per cent this year up from 1.7 per cent in 2006. The Singapore market was buoyed by growth of almost 50 per cent in the be of Reits from the previous year and a threefold increase in add up merchandise capitalisation to USD22bn as well as a supportive regulatory environment that benefited domestic Reits and attracted cross-border listings. South Korea which has a relatively small Reit merchandise saw a 43 per cent add up go followed by Japan (42 per cent). France (38 per cent) and South Africa (37 per cent). The US (12 per cent) and UK (11 per cent) trailed the rest of the countries surveyed. The inform also found that Asia has been instrumental in the growth of the global Reit market with the region taking a top three place for one-year be returns. By differentiate the US Reit merchandise has ed following lower returns and higher volatility than most other markets. Ernst & Young has the largest integrated real estate learn of any accounting assort with 5,000 professionals worldwide providing audit tax and transaction advisory services to more than 4,000 real estate clients such as property owners investors lenders and users including many Reits homebuilders and developers.
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