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The World’s Largest Real Estate Investment Trusts (REITs)

by Marcus Lu
This post is by Marcus Lu from Visual Capitalist

World's largest real estate investment trusts

The World’s Largest Real Estate Investment Trusts (REITs)

Real estate is widely regarded as an attractive asset class for investors.

This is because it offers several benefits like diversification (due to less correlation with stocks), monthly income, and protection from inflation. The latter is known as “inflation hedging”, and stems from real estate’s tendency to appreciate during periods of rising prices.

Affordability, of course, is a major barrier to investing in most real estate. Property markets around the world have reached bubble territory, making it incredibly difficult for people to get their foot in the door.

Thankfully, there are easier ways of gaining exposure. One of these is purchasing shares in a real estate investment trust (REIT), a type of company that owns and operates income-producing real estate, and is most often publicly-traded.

What Qualifies as REIT?

To qualify as a REIT in the U.S., a company must meet several criteria:

  • Invest at least 75% of assets in real estate, cash , or U.S. Treasuries
  • Derive at least 75% of gross income from rents, interest on mortgages, or real estate sales
  • Pay at least 90% of taxable income in the form of shareholder dividends
  • Be a taxable corporation
  • Be managed by a board of directors or trustees
  • Have at least 100 shareholders after one year of operations
  • Have no more than half its shares held by five or fewer people

Investing in a REIT is similar to purchasing shares of any other publicly-traded company. There are also exchange-traded (Read more...)

Blockchain Applications: Tokenization of Real Assets

by Sponsored Content

The following content is sponsored by Global X ETFs.

Global X BKCH ETF

The Briefing

  • Tokenization is a solution that divides the ownership of an asset into digital tokens
  • This process could democratize investment in physical assets

Blockchain Applications: Tokenization of Real Assets

Did you know that blockchain has the potential to transform the way we invest in physical assets?

Tokenization is a solution that divides the ownership of an asset (such as a building) into digital tokens. These tokens act as “shares”, and are similar to non-fungible tokens (NFTs). The difference here, however, is that the tokens are fungible and they are actually tied to the value of the asset.

In this graphic sponsored by Global X ETFs, we visualize how tokenization could be used in real estate.

Tokenization in Real Estate

Blockchain has strong potential in real estate investing because it mitigates many of the asset class’ hurdles. Here’s a brief round-up of its theoretical advantages:

Liquidity

Buying and selling real estate is normally a tedious process. If a property were to be tokenized, it would essentially cut out the middleman and allow buyers and sellers to transfer ownership directly.

These transfers would be as easy as buying and selling cryptocurrency.

Removing barriers to entry

Because properties are expensive, real estate investing is typically limited to institutional investors with large amounts of capital. Individuals can gain exposure through a real estate investment trust (REIT), but these vehicles can carry high minimums and fees.

Tokenization could enable individuals to buy and sell (Read more...)