The development of Real Estate Investment Trusts (REITs) around the globe has been a relatively recent phenomenon. REITs were initially set up in the US in the 1960s to enable all investors, not just the wealthy, to buy commercial real estate in a cost and tax efficient structure. They also brought liquidity to what is otherwise an illiquid asset class. There are now just over 40 countries with REIT legislation in place with at least eight more considering it. In fact, if we focus on emerging markets we have seen our universe of stocks grow from around 70 with a market capitalisation of $25bn in 2008 to around 235 with a market capitalisation of approximately $625bn today. Our view is that this growth will continue as emerging markets mature and continue to grow more rapidly than their developed counterparts.
City of London Investment Group PLC (LON:CLIG) is an asset management group whose principal activity is providing emerging market asset management products to institutional investors via its principal operating company City of London Investment Management Company Limited.
