Book Review — Guide to Global Real Estate Investment Trusts

Guide to Global Real Estate Investment Trusts.  Stefano Simontacchi and Uwe Stoschek (eds). Walters Kluwer, 2010. ($358 | Paperback:  978-9041-12846-1 | various pagings).

Real estate investments have been in the news a lot in the last year.  Although real estate investment trusts (REITs) have not been as prominent as credit default swaps, learning about how REITs work in an international context seems like a good idea.  The Guide to Global Real Estate Investment Trusts provides readers with a basic and comprehensible explanation of REITs and how they function internationally, particularly focusing on tax issues.  Written for a broad audience including investors and regulators, this book provides a valuable entry point for those of us who are not experts in REIT law but would like to understand how it works.  As such the title would fit well into a library with a general law collection, such as an academic library or a library at a firm that handles financial services or tax matters.

Stefano Simontacchi and Uwe Stoschek did a good job of organizing the contents.  The reader first encounters a “General Report” that describes REITs and the existing global frameworks that govern them.  The Report also describes in great detail tax issues that may affect a REIT or its investor.  The General Report is followed by individual country reports for 19 countries located in North America, Europe, Oceania, and Asia.  The country reports were generally written by practitioners in the particular jurisdictions—often, though not always, the practitioners were affiliated with PricewaterhouseCoopers. The country reports all followed the same organizational structure, allowing for easy comparisons across jurisdictions.

The Guide meets its goal of accessibility.  The country reports, for example, begin by describing the “key characteristics,” which includes a non-standard citation to the relevant law and the structure of REITs in the country, as well as the relevant regulatory agency or body.  With that context, a novice can then understand the more complete information available, such as requirements regarding capital; distribution; accounting; and advertising or the country’s tax scheme for REITs.  Unfortunately, though laws may be mentioned by name, there is no Table of Authorities or similar tool that would be useful for attorneys hoping to find or view a primary source document from a particular country.  Investors and other non-expert readers will find the four page list of abbreviations helpful when navigating the Guide.  Finally, the authors of each country report include their electronic contact information, making the authors extremely accessible to the readers.

The editors recognized the challenge of continuing to update the title.  This is not surprising, given the growing number of countries that have authorized REITs.  As the authors note, there are now more than 30 countries in which REITs are authorized, and the majority of those laws were passed in the last 10 years (General Report-5).  Identifying countries newly authorizing REITs and updating the current information will be a project of significance.

Another difficulty the editors recognize is the pending proposals made by the Organization for Economic Cooperation and Development (OECD) to improve the legal and tax aspects of the REIT systems in the European Union (lxi).  The authors responded to this difficulty by including two appendixes.  The first is a public discussion draft of Tax Treaty Issues Related to REITs that was issued by the OECD, along with the call for comments.  The second is the Informal Consultive Group’s (ICG) subsequent report to the OECD with recommendations regarding the taxation of REITs.

REITs are becoming an increasingly popular investment tool for those who do not have enough money to invest solely in a property, but who would like to invest in real estate and have a little extra money.  The Guide is surprisingly accessible and remarkably interesting, and it will provide those investors with a better understanding of how the investment functions and its tax consequences.

Margaret (Meg) Butler (Margaret.butler@nyls.edu) is international law reference librarian and professor of legal research at New York Law School in New York City.