CANNES-As stateside REITs succumb to the allure of the private sector, the fledgling trust market in Europe continues to fire on all cylinders, and the progress of new countries adopting REIT structures and new trusts forming in countries that have already embraced the trust concept are expected to continue unabated. Fraser Hughes, research director of the European Public Real Estate Association, the sister organization to the Washington, DC-based National Association of Real Estate Investment Trusts, says that comparisons between the two dynamics is unfair.

"Around the world, you have REIT structures at different stages of maturity," he states. "The US has had a REIT structure in place since 1960, but in Asia and Europe it's still in its infancy." The relative periods of time these structures have been in place makes comparisons difficult at best, he believes. But, "That doesn't mean that 15 years from now, when these markets are mature, you won't see in Europe the level of consolidation we're seeing in the US."

But it's more than just timing, and Hughes argues that it's also a matter of inventory. While the European market pooled together would overshadow the size of the US real estate market, in the US, "There's a lot more in the public domain," he states. "That means that you're going to get a lot more of the Blackstones of the world [referencing Blackstone's recent buy-out of Equity Office Properties] coming in and taking out public companies." In essence, bigger targets accumulate more arrows.

"My view is that the trend is not an issue," he says. "Right now, we're more concerned with encouraging individual countries to adopt the REIT structure." He concluded with his confidence that the long-awaited German REIT structure, as well as a similar form in Italy, will be in place before the end of the year, and that more companies will file for status within the structure launched in the UK on Jan. 1 of this year.