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One-year-old Reits 'a success'

02 January 2008 / by None
A year after their launch, real estate investment trusts (Reits) have been branded a success.

According to Reuters, a drop in share prices of some 40 per cent has not affected the success of such trusts, with large numbers of firms converting to Reits during 2007.

More than three-quarters of top listed property firms have converted to Reits status, meaning that the 17 UK Reits are now collectively valued at some £25 billion.

Investors are attracted to the ability of Reits to provide "long-term predictable income", commented Dave Butler, programme coordinator of campaign body Reita.

He told Reuters: "The benefit of liquidity, that is inherent in the Reit structure, is becoming ever more obvious."

The news agency's article suggested investors are also attracted to the opportunity to add indirect property investments that are tax efficient to their portfolios.

When they were first introduced, Reits elicited a "sceptical" response from many finance experts, but their success is now evident, the Times stated.

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