Mr. Crowe agreed. "The proliferation of REIT markets is very important and goes hand in hand with the globalization of our sector," Mr. Crowe said in his speech. "If we have this consistent, transparent framework around the world, it makes the whole idea of taking advantage of the global opportunity much more feasible."
"What you can see is the persistently low correlation between regions for real estate, and what's driving that is the fact that real estate is a local business," he added. "But the benefit for the investor is a very strong increase in risk-adjusted returns and expand(ing) one's opportunity set."
"It gives institutional investors the ability to globalize their real estate allocation in a similar manner as they globalize stock and bonds allocations," Mr. McAllister said. "It's a natural follow-on for large plans that are very sophisticated ..."
Most of the appetite for global REITs will probably come from countries like Australia that have limited markets, said Bruce Eidelson, director real estate advisory services for Russell Investment Group, Tacoma, Wash. "It comes from markets with smaller home (real estate) markets. Australian investors need to look outside their home country," Mr. Eidelson said. "I see more interest in Europe. I have not seen a whole lot from the U.S., but that could evolve."
The €157 billion Stichting Pensioenfonds ABP, Heerlen, the Netherlands, has been investing in global real estate securities since 1997, said Robert Jan Foortse, senior portfolio manager at ABP, at the NAREIT forum. The plan's current asset allocation is 44% fixed income, 36% equities and 20% in alternative investments, he said. Of this 20%, half will go into real estate.
"This implies that we have invested €15 billion globally in real estate," Mr. Foortse said. "Now we only invest indirectly in real estate, and indirectly in real estate for us means both in public real estate and private real estate, but we will not own single assets anymore. Of the €15 billion euros … 48% is in Europe, 44% is in the U.S., and the balance is in Asia Pacific."