Reiss cites such examples as tax reform and fund legislation enacted last year in Germany that has spurred a huge wave of capital into US, UK and other markets in the last nine months. She notes that the creation in France of an optional tax regime allowing the conversion of publicly owned real estate investment companies into tax-transparent vehicles known as F-REITs has the potential to create a significant inflow of capital into French real estate, much of it from US investors. However, she cautions that the French finance ministry has yet to publish detailed guidance on this regime.

Similar REIT-style legislation is forthcoming in markets such as Argentina and Singapore – increasing transparency and prompting increased interest among foreign investors. Even in the United Kingdom, the only G-7 country without a tax-transparent REIT-style investment vehicle, the signs are that the Treasury may be more receptive to instituting such a regime. The move would put the UK investment market on a par with the US, Australia and Japan.

Ernst & Young LLP has just published an updated and expanded 2003 edition of Real Estate: The Local Global Economy – The Ernst & Young Guide to Selected Real Estate Markets Around the World. The 2003 guide includes background to real estate investment, tax, accounting and leasing information for 39 countries around the world including the US.

Twelve countries have been added to this year's edition. They are Cyprus, Estonia, Finland, Greece, India, Latvia, Lithuania, Philippines, Portugal, Russia, Taiwan and Turkey. Gerald Gaige of Ernst & Young's Real Estate Advisory Services practice in Russia and the CIS countries says that, unlike most Western real estate markets, Russia provides unique opportunities for foreign real estate investors because the availability of business facilities built to Western standards continues to lag demand. "In the US and other Western markets, vacancy rates are on the rise but this is not true in Russia where the tremendous growth in the private economy has left business scrambling for office and manufacturing space," according to Gaige. "This makes Russia a market ripe for Western investment, full of opportunities and challenges, and offering the possibility of attractive returns commensurate with the risks."

The revised publication, which also includes updated information for the United States, can be ordered online at http://www.ey.com/realestateglobalguide.

Instant Insights /

Real Estate Industry Globalization is on the Horizon

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