NEW YORK CITY-As REITs continue to fight headwinds, make newacquisitions and recycle assets, the sector is still facingchallenges—especially in terms of raising capital, as outlined in anew report by Ernst & Young LLP.

The study, entitled 2012 Global Perspectives, says that the onlycountry outside the US in which REITs had the ability to raiseequity through secondary offerings was Japan during Q1. The reportalso found that IPOs were wholly an American REIT phenomenon, withUS REIT formation accounting for 75% of the $2.4 billion in IPOactivity in six markets, including Australia, France, Japan,Singapore, UK and US.

The US – which remains the largest of the six markets – had atotal market capitalization of approximately $632 billion, followedby Australia, with a total cap of $81 billion. On the return front,the US clocked in at 10.6%, ahead of the Aussies at 8.1% but behindJapan at 20.4%. However, the US dominated the five other marketsover a three-year return period at 61%, more than double posted bythe next best market, Singapore at 28%.