Proposed new REIT legislation in the UK and Germany would encourage their spread beyond the United States, Australia, Japan and France, where these assets are already firmly established. "Once the UK and Germany adopt the legislation, the rest of the world could follow in short order. It will open up the world to listed real estate," says Robert Valero of the National Association of Real Estate Investment Trusts.

"The debate in the UK has been going on for too long, and I am hoping it will come to some sort of conclusion this year," Fraser Hughes, head of research at the European Public Real Estate Association (EPRA), adds.

The British government is expected to give more detail on the likely shape of proposed UK REIT legislation during next week's annual budget statement. Ministers have already suggested UK property firms that restructure themselves as REITs would get an exemption from corporation tax on rental income or capital gains as long as 95% of profits are directed to shareholders. Industry analysts suggest this could lead to a quadrupling of Britain's quoted property sector.

But less popular with the industry is a proposed sizeable conversion charge and a proposed 10% limit on single shareholdings. "If they maintain that rule, it will be difficult to see how many UK property companies will come to market, because many are closely held by families," Hughes says.

In Germany, new laws are expected this year that would make REITS an alternative to the open-ended property funds. The funds recently have struggled with investor concerns about overvalued assets. Germany is Europe's biggest property market, with an estimated worth of $1.3 trillion, but only 3% are included in quoted companies.