Wechsler: 30 global REITs and counting.

DUBLIN-REITs’ global spread continues. Irish finance minister Michael Noonan has promised that he will introduce legislation that would lay the groundwork for trusts to establish here.

REITs Forum is a group of Irish market experts who have volunteered to lobby for Irish REITs. Headed by Bill Nowlan of WK Nowlan Property Asset Managers and an ex-president of the Society of Chartered Surveyors, the Forum believes that the introduction of REITs would help stabilize an increasingly hot but nevertheless fragmented market.

“The Irish property industry prior to its implosion was irrational,” he says. “The majority of property investment deals was characterized by being overpriced, over-geared, and undiversified single-asset investments. Best-practice REITs will consist of competently constructed and diversified portfolios that will be professionally asset-managed by property and financial professionals.”

He adds that, as opposed to the unregulated nature of trades there to date, REITs, falling under the rules of listing with the Irish Stock Exchange, “will be subject to rigorous governance, and on a voluntary, but essential, basis compliance with EPRA standards. The REIT legislation will prohibit over-gearing and over-exposure to higher risk property development.” EPRA is the foreign version of NAREIT.

According to the Washington, DC-based NAREIT, there are now approximately 30 countries that have launched REITs, based largely on the US model. That brings the dollar value of the FTSE NAREIT Global Real Estate Index up to $1 trillion.

“REITs are unfolding worldwide,” writes NAREIT president and CEO Steven A. Wechsler. “The global opportunity in REITs will continue to grow as legislation is adopted in more countries around the world.”

As that happens, he continues, “the global growth of REITs will create the basis for exciting new financial products that will provide new opportunities for banks, brokerages and money management firms around the world –and generate value for REITs and their shareholders.”