“Globally, 83% of listed property companies have opted for the real estate investment trusts (Reit) structure, a figure that rises to 98% in the US,” said Tobias Steinmann, director public affairs at the European Public Real Estate Association at the Alfi Private Assets Conference on 1 October 2025. While Europe has the lowest share of Reits in its listed market at 47%, Steinmann thinks it is partly due to factors like Sweden not having a Reit regime and Germany's restrictions on residential properties.
“Most of them (listed real estate companies) are actually blue-chip stocks [included] in the most prominent indices across Europe, representing €880bn in Europe alone,” stated Steinmann. “Pension funds and insurance companies like the non-speculative, long-term, transparent and the highly liquid characteristics of our sector.“
A “well-established structure”
Steinmann remarked that Reits were invented in the US in the 1960s and adopted in Europe, starting with the Netherlands in 1969. Today, 44 countries globally, including all G7 nations, have Reit regimes, covering 85% of the world's GDP.
“There is a clear trend globally to choose the Reit structure,” said Steinmann. He explained that they offer numerous opportunities and benefits for investors and markets:
• Available in several European countries: 14 countries (including the UK) in Europe have a Reit regime. Luxembourg is “considering” the product.
• Diversification: They provide access to thousands of assets across various geographies and sectors.
• Liquidity and democratisation of real estate: REITs allow individual investors to purchase small shares in large property portfolios (like shopping malls) at a low cost, investing alongside major institutional investors. This is facilitated by their high liquidity and transparency, which is a key advantage over private real estate funds.
• Strong performance: Reits “consistently” offer higher dividend yields than other public markets and have shown strong long-term performance, often outperforming other investment vehicles. Steinmann’s slides displayed a 5.44%, 4.99% and 4.76% historical yield over the one-, three- and five-year timeframes for the FTSE EPRA Nareit Developed Europe Reits Index against 3.5%, 3.35% and 2.01% for the ECB refinancing rate. This makes them particularly attractive to long-term investors like pension funds and insurance companies who seek stable and predictable income.
• Positive market impact: A well-structured Reit regime can significantly boost domestic property markets. Spain, Steinmann noted, saw its Reit market cap grow ninefold (from €500m to €4.5bn) in just five months after improving its legislation. This was the result of the launch of several new Reits.
• Significant tax contributions: Despite not paying corporate income tax, Reits contribute substantially to public finances through other taxes, such as property taxes and withholding taxes on dividends. Steinmann commented that an analysis by PWC showed that for every €100 of turnover, €33 is paid in tax.
Protecting the Reit model
Steinmann commented that Reits were granted a "carve out" from the OECD's "Pillar Two" global minimum tax initiative, ensuring their tax-neutral structure remains intact. Furthermore, upcoming changes to EU legislation (Solvency II) will make investing in Reits more attractive for insurance companies by halving their capital requirement from 39% to 22% “for long-term equity.” As a result, Steinmann expects the new regulation to lead to “massive new investment inflows” starting in 2027.
