Indirect Property Investments

Real Estate Securities

Real estate securities combine a globally diversified property investment with high liquidity managed by experienced, local teams with excellent historical track records.

The term real estate securities refer to exchange-traded property investments. While this term could also include instruments such as debt securities, it more commonly refers to equity securities and it is these that are the focus of discussion going forward. The most common example of a listed real estate investment is the Real Estate Investment Trust (REIT), which is not subject to taxation at the corporate level and must, in return, comply with specific regulatory frameworks. REITs were established in the US several decades ago and have since become the predominant form of listed property investments. Over the past decade, European and Asian countries have increasingly adopted REIT structures. In addition to REITs there are, however, other listed real estate companies, particularly in Europe. Even though they are not REITs, they follow very similar strategies.

Real estate securities combine a property investment with a high level of liquidity. Given the securities trade on global stock exchanges, investors have the ability to adjust their portfolio holdings on a daily basis. Investments in real estate securities provide investors with an attractive return profile, including traditionally high dividend payments. Their correlation to the general equity market has historically been low.

As opposed to direct property investments, real estate securities provide investors with the opportunity to structure a highly diversified property portfolio with a significantly reduced capital outlay. A high level of diversification is reached both geographically (North America, Europe, Asia) and from a sectoral perspective (office, retail, industrial, residential etc.). It enables the investor to benefit from different property cycles within different regions. Moreover, various investment strategies can be implemented. Historically, correlations between regions and sectors have been relatively low.


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