CHAPTER 16Investing in Global REITs: (Contributed by Scott Robinson)
“The essence of investment management is the management of risks, not the management of returns.”
—Benjamin Graham
The global landscape for real estate investing continues to flatten with each passing day thanks to the kind of technological capabilities driving (or damaging) so many subsectors. News is now delivered faster. So are consumer staples and other products, as well as the flow of business capital that can be managed from your desktop or smartphone.
This globalization isn't new. It's been on the forefront of investors' minds since at least the early 2000s. What has changed is the importance and interconnectivity of countries, regions, and – perhaps even more importantly – cities. In many respects, this highlights how the long‐term trend of urbanization (short‐ or even mid‐term trends notwithstanding) is at the core of the real estate global evolution.
The industry will always ultimately be based on “local” strategies executed by regional sharpshooters. But urbanization has made those city‐specific opportunities bigger and better than ever.
It's estimated that the total size of the global investable real estate market is about 80% of the total global non‐real estate equity market cap. While this is a massive figure, what's more interesting is that only a fraction of this total real estate market is “institutionally owned” by such entities as pension plans, private equity funds, and REITs.
This represents ...
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