The Gulf Cooperation Councill (GCC) has witnessed significant growth in the number of real estate investment trusts (REITs) across the region, with over seven publicly listed REITs established to date. Since 2006, regulations have perm itted REITs in the Dubai International Financial Centre (DIFC), but previous market downturns delayed any real progress within this particular sector of real estate. The first REIT in the United Arab Emirates (UAE) was established in 2010. More recently in the UAE, ENBD REIT and the Emirates REIT were listed on NASDAQ Dubai with market capitalisations of $261 million and $289 million respectively. In other GCC countries, such as Bahrain and Kuwait, there are now private REITs with total sizes of $80 million and $100 million, respectively. The introduction of REITs in Saudi Arabia by the Capital Market Authority (CMA) in 2016 was part of the National Transformation Program (NTP) and Saudi Vision 2030. This included a regulatory framework with a minimum of 100 million Saudi riyals ($26.67 million) capital for REITs, and borrowing not rising above 50 percent of the fund’s total asset value. The market in Saudi Arabia is divided between two REIT investment strategies, the mixed-asset and the specific-asset class approach, with a tendency towards the specialisation of REITs, along with a focus on asset classes that are common to the region, such as office, retail, education, healthcare and logistics. The making of the REIT The goal of the REIT is to provide investors with access to high-grade, low-risk, income-generating real estate assets. About 45 percent of investment professionals in the region see the GCC’s real estate market as mature enough for REITs to surge. Although tax efficiency has less impact on the REITs in the GCC, it offers liquidity and flexibility for investors and real...

In September 2016, real estate became the 11th Global Industry Classification Standard sector.  Morgan Stanley Capital International Inc. and S&P Dow Jones Indices, which maintain the standardized classification system for equities, described the action as reflecting the “growing importance of real estate in the world’s equity markets” and “the position of real estate as a distinct asset class and a foundational building block of a modern portfolio, rather than an alternative.” The GICS classification means real estate asset performance is no longer blended into a larger financial picture but stands fully accountable on its own merits.  This has prompted many companies to capitalize on real estate’s status as an increasingly viable asset class.  For example, Cousins Properties Inc. completed the spinoff of Parkway Inc. into an independent REIT in October 2016.  In March 2017, shopping center owner, operator and developer Regency Centers Corporation merged with Equity One Inc. to form a $16 billion company.  Government Properties Income Trust acquired First Potomac Realty Trust for $1.4 billion later that year. Alex Stanton, Yardi’s industry principal for commercial, offers insight into best practices for participating in the growing mergers and acquisitions trend. The following are his thoughts on how to prepare: The increasingly common exchanges of real estate following the GICS designation aren’t the exclusive province of the big players; it’s happening with medium and small real estate companies as well, including enterprises that are family owned and operated. Mergers and acquisitions hold high potential to benefit shareholders, staff and customers of the newly created entity—but only if the organizations involved put the right strategy and assets in place.  Here are some ways to do that. Put People First A company may be privately owned and dreaming of being a REIT, or planning to open funds...

While international markets reel in the aftermath of the Brexit vote, U.S. REITs and senior housing providers are well poised to not only survive, but thrive. It will be months before the international markets begin to feel the effects of the Brexit vote, and probably years before any real assessments can be made on the economic and political impacts of Britain’s decision to exit the European Union. With uncertainty and fear looming, Senior Housing News (SHN) presents a mostly reassuring profile explaining how the U.S. senior housing market can weather the storm. The bottom line: U.S. senior living providers will not only survive, but perhaps even thrive thanks to a mix of strong portfolios, stable property values, and domestic insularity. Evolving Circumstances There’s plenty to worry about in terms of Britain’s separation from the E.U. Many predicted complete economic Armageddon and while the U.S. stock market did experience a round of sell-offs and tanking stock values, overall international markets seem to be holding steady. Additionally, some REITS with senior housing in their portfolio actually performed quite well, with both Ventas and HCP ending the day on an upswing. Although a weakened British pound may introduce another layer of caution, slower expansion does not necessarily translate to catastrophe. In fact, many U.S. REITS may capitalize on the opportunity presented by a more favorable exchange rate by increasing property acquisitions in the U.K. “[Brexit] will give them more of the field to themselves because the levered investors are going to find debt financing somewhat difficult in the next couple of quarters,”  Keith Harris, London-based executive director for specialist markets at CBRE Limited, tells SHN. “…I think the international investor who can take a long view on currency hedging is going to be fine. If anything, the...