Industry Analysis & Industry Trends
A real estate investment trust (REIT) is a company that owns and manages property on behalf of shareholders. REITs are exempt from corporate tax but must pay out 90% of their net property income to their shareholders. They are closed-ended and listed on a public exchange. REITs came into existence in the United Kingdom on 1 January 2007. As of October 2016, there are 44 REITs.
Owing to the result of the EU Referendum, the industry is expected to experience a turbulent year in 2016-17. Fears over the level of future demand for commercial real estate and rental yields and low demand in the wake of the vote led to a sharp decline in the value of many REITs. Consequently, IBISWorld estimates that industry revenue will decline by 6.8% over 2016-17 to approximately £6.1 billion... purchase to read more
Industry Report - Industry Products Chapter
Based on market capitalisation, the most popular REITs operate in the diversified portfolio segment. These REITs own and manage properties across different sectors, such as offices and retail properties. The diversified portfolio segment is expected to account for nearly half the industry in 2016-17. Diversified portfolios are expected to remain popular over 2016-17, with demand remaining relatively constant.
Retail REITs are the second most popular segment. This segment includes REITs with portfolios of retail properties such as superstores, shopping centres and department stores. The growth and success of REITs in this segment is highly correlated with the ability of their tenants to draw in foot traffic.
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