New equity in Europe’s capital markets is to double in size to E140bn (£94.6bn) as REIT legislation expands across the continent, according to the latest findings of investment bank JP Morgan.
While REITs have been a long established in countries such as Australia, where listed property accounts for 44% of the country’s total, the tax efficient structure is a new to Europe with France the first to embrace the structure in 2003.
Harm Meijer, JP Morgan’s real estate analyst, said: ‘The key driving forces behind this forecasted expansion is the introduction of REIT legislation in the major European markets and the greater availability of investment grade property from private property funds, corporates and governments. On top of this, solid economic fundamentals and increasing investor allocations to real estate will further support this growth.’
According to EPRA, Europe accounts for just 22.6% of the global REIT market with an estimated value of E754bn (£554bn) despite owning 42.3% of the world’s directly invested property. JP Morgan reported that from 2009, the termination of European non-listed property funds will accelerate and approximately E26.9bn (£18.1bn) of gross assets will become available for potential listing.