According to the National Association of Real Estate Investment Trusts (Nareit), the global REIT market is worth about US$1.9 trillion ($252 billion), with a total of 893 listed REITs as of December 2022. According to REIT AsiaPac, there are 183 Asia Pacific REITs with a market capitalisation of US$238 billion as of Oct 31, 2023. Asian REITs comprise Australia, Japan, Hong Kong and Singapore, and their total return reached 51% in the last 10 years, relative to the broader equity markets. Most REITs are focused on a particular type of property or hold multiple types of properties in their portfolios. Major types in Asia include retail malls, warehouses, data centres, hotels, apartments and offices.
Real estate investment trusts or REITs own income-producing real estate assets and can play an important role in investment portfolio diversification. Required to pay out at least 90% of income to unitholders, they offer high dividend yields of 4%–8% per annum in Asia, significantly higher than other equities.
By requiring a smaller capital outlay than direct investments in the property market, REITs are an excellent way to gain access to real estate without buying property outright and provide a stable income stream via regular distributions.
