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SYDNEY-The global market capitalization of REITs stands at $608 billion and is rising fast, according to a new report by Ernst & Young. New opportunities are emerging in lesser known markets as well. For instance, REITs in South Africa have produced average returns during the past three years of 34.2% and with the least debt on its REIT assets of any country in the world.

The report examined REITs in 13 separate countries across four world regions—484 REITs total–but the authors warned that the lack of a standardized global method for calculating and reporting performance made comparisons difficult. “Our aim in putting together this report was to compare as closely as possible the relative performance of various REIT vehicles around the world,” says report co-author Ed Psaltis. “What we learned is that the REIT sector is well-established in most major regions of the world and is fast becoming a significant factor in molding world economies and investment choices.”

Much of the new growth is being driven by rapidly expanding REIT markets in Australia, France, Japan, Canada, the Netherlands, Singapore and Hong Kong. Further growth is expected from two main sources. Established markets are likely to continue to convert private portfolios to public ownership. And new legislation creating REIT-like vehicles is underway in more countries—most notably Germany and the United Kingdom. Of the $608 billion, the US accounted for $395 billion. Including gearing, the value of the assets held by the 484 REITs totals in excess of $890 billion.

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