• Be an entity that is taxable as a corporation
• Be managed by a board of directors or trustees
• Have shares that are fully transferable
• Have a minimum of 100 shareholders
• Have no more than 50 percent of its shares held by five or fewer individuals during the last half of the taxable year
• Invest at least 75 percent of its total assets in real estate assets
• Derive at least 75 percent of its gross income from rents from real estate property or interest on mortgages on real property
• Have no more than 20 percent of its assets consist of stocks in taxable REIT subsidiaries
• Pay annually at least 90 percent of its taxable income in the form of shareholder dividends

        (Source: NAREIT’s website)

Statistics:

• There are approximately 200 publicly traded REITs in the today, with assets totaling more than $475 billion.
• The shares of these companies are traded on major stock exchanges, which sets them apart from traditional real estate. Other REITs may be publicly-registered but non-exchange traded or private companies.
• The majority of these listed REITS are listed on the New York Stock Exchange.
• About 20 REITs are registered with the SEC but are not publicly traded.
  Approximately 800 REITs are not registered with the SEC and are not traded on a stock exchange

REITs often are classified in one of three categories: equity, mortgage or hybrid.

Equity REITs

• Equity REITs own and operate income-producing real estate.
• Equity REITs increasingly have become primarily real estate operating companies that engage in a wide range of real estate activities, including leasing, development of real property and tenant services. However the difference between REITs and other real estate companies is that a REIT must acquire and develop its properties primarily to operate them as part of its own portfolio rather than to resell them once they are developed.

Mortgage REITs

• Mortgage REITs lend money directly to real estate owners and operators or extend credit indirectly through the acquisition of loans or mortgage-backed securities.
• Today’s mortgage REITs generally extend mortgage credit only on existing properties.
• Many modern mortgage REITs also manage their interest rate risk using securitized mortgage investments and dynamic hedging techniques.

Hybrid REITs

• A hybrid REIT both owns properties and makes loans to real estate owners and operators.

(Source: NAREIT’s website) 

(1) Allied Property REIT
Allied Property REIT is a leading owner of Class I (“brick-and-beam”) office properties in Toronto and a leading office property owner in the large areas immediately to the east and west of Toronto’s downtown core.http://www.alliedpropertiesreit.com

(2) Canadian REIT

CREIT owns a diversified, high-quality real estate portfolio with approximately 110 retail, office and industrial properties located throughout Canada and in the Chicago, Illinois area of the U.S.. It is a self-advised and self-managed REIT, established in 1984 and re-organized as a REIT in 1993.
http://www.creit.ca

(3) Primaris Retail REIT
Primaris Retail REIT (formerly Borealis Retail REIT) owns Canadian mid-market retail centres in major cities and dominant shopping malls in secondary cities. The REIT is managed by Oxford Properties Group, one of Canada’s most experienced managers of income producing properties.
http://www.primarisreit.com

(4) Alexis Nihon REIT
With over 60 years experience and a reputation for excellence the Alexis Nihon Group created the Alexis Nihon REIT in December 2002. The REIT’s portfolio consists of high-quality, diverse real estate assets in the Greater Montreal Area and the National Capital Region.
http://www.alexisnihon.com

(5) Boardwalk REIT
In 2005, Boardwalk REIT owns and operates in excess of 250 properties with over 32,000 units and is Canada’s largest owner/operator of multi-family rental communities. Its portfolio is concentrated in the provinces of Alberta, Saskatchewan, Ontario and Quebec.
http://www.boardwalkreit.com

(6) Calloway REIT Calloway REIT is engaged in the acquisition and management of well located office, industrial and retail properties across Canada. In January 2005, its portfolio consisted of 7.5 million square feet of leaseable area across

http://www.callowayreit.com(7) Canadian Hotel Income Properties REIT
CHIP REIT is a multi-brand owner and manager of mid-market and upscale full-service hotels with approximately 32 hotels in its portfolio. CHIP Hospitality is the hotel management arm of CHIP REIT.
http://www.chipreit.com

(8) CAP REIT

 CAP REIT is one of Canada’s largest owners of multi-family rental communities with a strong presence in most major regions of Canada. It offers a full range of well-maintained, high-quality rental suites tailored to meet its tenant’s needs at very competitive rates.
http://www.capreit.net

(9) Chartwell Seniors Housing REIT

 The amalgamation of three industry leading companies, Chartwell Seniors Housing is a Canadian owned and operated company that provides Canada’s most comprehensive range of both service and accommodation, from Independent Living Retirement Residences to Long-Term Care.
http://www.chartwellreit.ca

(10)  Cominar REIT

 Cominar REIT owns and manages office, commercial, industrial and mixed-use buildings in the Quebec City region and Montreal. Cominar manages approximately 9.0 million square feet of leasable area and is also engaged in the acquisition, development and renovation of commercial properties.
http://www.cominar.com

(11) Dundee REIT

Dundee REIT owns high quality, affordable office, industrial and retail properties located across

http://www.dundeereit.com

(12) H&R REIT

 H&R REIT owns a portfolio of office properties, single-tenant industrial properties, retail properties and mezzanine financings for development projects encompassing approximately 29 million square feet. Most of its properties are located in the Greater Toronto area.
http://www.hr-reit.com

(13)  Huntingdon REIT

HREIT is a closed-end REIT that invests in retail, office, and residential properties nationwide. HREIT is managed by Shelter Canadian Properties Ltd.
http://www.hreit.ca

(14) Inn Vest REIT

InnVest owns the largest hotel portfolio in Canada comprised of internationally branded, limited service or mid-scale full service hotels -located in every Province. It has a 50% interest in Choice Hotels Canada, the largest franchisor of hotels in the country.

http://www.innvestreit.com

(15) IPC

IPC US Income Commercial REIT is the only REIT in Canada that invests exclusively in U.S. commercial real estate. It manages its own portfolio and in January 2005 had approximately 8.5 million square feet of office and retail space throughout the

http://www.ipcus.com

(16) Lakeview Hotel REIT

Lakeview Group owns and invests in residential units, office buildings and retail spaces. In addition to maintaining properties all over North America, Lakeview’s Ichiban chain of Japanese steakhouses have helped diversify their portfolio. Lakeview Hotel REIT was started in 2004 to expand the network of Lakeview hotels.
http://www.lakeviewhotels.com

(17)  Lanesborough REIT Lanesborough REIT is a Winnipeg based company established in April 2002 to invest primarily in a portfolio of retail, residential, industrial and office properties located across Canada.
http://www.lreit.com

(18) Legacy Hotels REIT

Legacy is Canada’s premier hotel REIT with 24 first-class hotels and resorts located in Canada and in the United States. The portfolio includes landmark properties such as Fairmont Le Château Frontenac, The Fairmont Royal York, The Fairmont Empress and The Fairmont Olympic Hotel, Seattle. The management companies of Fairmont Hotels & Resorts Inc. operate all of Legacy’s properties.
http://www.legacyhotels.ca

(19) Morguard REIT

Morguard REIT, established in 1997, owns and manages a portfolio of well diversified real estate assets located across Canada including shopping centres, office and industrial buildings.
http://www.morguardreit.com

(20) Northern Properties REIT

Northern Property REIT invests in a portfolio of mainly residential income-producing properties located in the Northwest Territories, Nunavut and northern Alberta, much of which is leased to government and large corporations to meet staff housing needs. NPR also invests in commercial premises in

http://www.npreit.com

(21)  Retirement REIT

Retirement REIT provides care services and accommodation to Canada’s growing population of seniors. Its mandate is to provide the best possible standard of accommodation, care and services to our residents, and to treat them with respect, dignity, and compassion.
http://www.retirementreit.com

(22)  Retrocom Mid-Market REIT

Retrocom Mid-Market REIT is active in acquiring commercial properties in the mid-market sector of the real estate market. Their main properties are malls and shopping centres.
http://www.retrocomreit.ca

(23) RioCan REIT

RioCan is Canada’s largest REIT exclusively focused on retail real estate. Its core strategy of owning and managing community-oriented neighbourhood shopping centres anchored by supermarkets, together with a rapidly expanding mix of new format retail centres, has evolved ahead of retails trends.
http://www.riocan.com

(24)  Royal Host REIT

In January 2005, Royal Host REIT, owned 38 hotels, managed 142 properties and franchised 120 locations for over 20,000 guestrooms in the mid-market to upscale hotels in Canada. Royal Host also owns the master franchise rights for Travelodge in

http://www.royalhost.com

(25) Scott’s REIT

Scott’s REIT holds a portfolio of 190 retail properties across Canada. KIT LP is a tenant at all but one of the initial properties, and operates KFC restaurants on these initial properties.
http://www.scottsreit.com

(26) Summit REIT

Summit REIT owns a portfolio of high-quality light industrial properties in major markets across the country. Summit is one of Canada’s largest REITs and is known as ‘ Canada’s Industrial Landlord’.
http://www.summitreit.com

(27)  Sunrise Senior Living REIT

Sunrise Senior Living REIT owns a portfolio of premium living communities for seniors located in major metropolitan markets in Canada and the U.S. It is managed by Sunrise, one of the largest providers of senior living services in

http://www.sunrisereit.com

(28)  TGS North American REIT

In January 2005, TGS North American REIT portfolio consists of approximately 3.9 million square feet of net leaseable area of retail and office space located in the western United States and Canada. Headquartered in

http://www.tgsreit.com

(29) Westfield REIT

Westfield ’s objectives are to build value in the portfolio by acquiring quality commercial/retail or light-industrial properties in Western Canada and to provide investors with stable cash distributions.
http://www.westfieldreit.ca

(30)  Whiterock REIT

Whiterock REIT is focused on owning and acquiring high quality mid-market office, industrial and retail properties in select markets across Canada with the objective of producing a geographically and sectorally diversified portfolio of properties with stable and growing cash flows.
http://www.whiterockreit.ca

ProLogis is the world’s largest owner, manager and developer of distribution facilities, with 446.9 million square feet of industrial space (41.5 million square meters) in 105 markets across North America, Asia and Europe. The company leases its industrial facilities to 4,700 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises with large-scale distribution needs. ProLogis employ approximately 1,300 people worldwide

ProLogis was founded in 1991 on a single, core idea: that it could create exceptional value by focusing on service and forging close, long-term ties with the companies it serves. Traditionally, industrial developers had been transaction-focused rather than service-oriented. From its earliest days, ProLogis has embraced a different approach, seeking to become a valued business partner for its customers in an era of revolutionary change in manufacturing and distribution.

Since going public in 1994, ProLogis has experienced extraordinary growth. It has gone from $400 million in assets under management in just nine U.S. states to a global portfolio of properties valued at more than $29 billion. ProLogis continues to follow its customers into new markets and to extend its position as the global leader in industrial real estate.

[Extracted from its website pertaining to its 2006 Highlights]

2006 HIGHLIGHTS

• Grew ProLogis’ defined funds from operations per share, as adjusted, (FFO) to $3.70, up 36.5% from $2.71 in 2005, and net earnings per diluted share to $3.32, up 88.6% from $1.76 in 2005
• Achieved total shareholder return of 34.0%, including share price appreciation and dividends
• Increased dividend for the 13th consecutive year to a projected rate of $1.84 per share for 2007, a 15.0% increase
• Grew total assets owned and under management by 20.6%, to $26.71 billion, up from $22.14 billion at the end of 2005
• Recognized $131.2 million in incentive returns in our property fund business through the successful launch of ProLogis European Properties (Euronext: PEPR) and the formation of ProLogis North American Industrial Fund initiatives and development management fees

• Increased management fees by 216.6% within our property fund business, including incentive returns, and grew our share of property fund FFO by 32.9%
• Achieved record leasing of 102 million square feet of space in global markets, an increase of 7.7% over 2005
• Redeployed $1.53 billion of capital from the company’s CDFS pipeline, realizing $326.9 million of FFO, up 40.1% from 2005
• Began development of a record $2.54 billion of new facilities, up 18.1% over 2005
• Recognized $106.3 million of FFO from other CDFS activities, largely related to mixed-use

FINANCIAL HIGHLIGHTS

The year 2006 was one of significant accomplishment for ProLogis, resulting in a 36.5 percent increase in FFO per share, to $3.70. This strong growth supported our Board’s decision to raise our dividend by 15 percent, from an annual rate of $1.60 per share, to a projected rate of $1.84 per share in 2007.

All three segments of our business achieved excellent results. As anticipated, our property operations business performance improved significantly. Same-store net operating income was up 3.1 percent, driven by 2.6 percent increases in both average occupancies and rent growth on expiring leases. Additionally, for the year, 75.6 percent of our customers remained in place when their leases expired.

In our CDFS business, new development activity was well diversified across our global markets. We started $2.5 billion of new developments, up from $2.2 billion in 2005, and are projecting a 20 to 30 percent increase in new starts for 2007. Continued strong leasing in our development pipeline led to total CDFS dispositions in 2006 of $1.5 billion at healthy 24.3 percent post-tax, post-deferral margins. These proceeds were redeployed into new development, resulting in a total CDFS pipeline of $5.3 billion at year end.

Net increases in our property funds during 2006 of $1.7 billion generates recurring management fees, which combined with our share of the funds’ earnings, increases our return on equity. In addition, we realized substantial embedded gains in our property fund business. Through the liquidation of three North American property funds and the PEPR IPO, we recognized $131.2 million in incentive returns over the seven-year holding period, or the equivalent of approximately $0.07 of FFO per share annually. We also converted these funds into open-end structures that provide liquidity to our fund investors while allowing us to perpetuate management fees and recognize incentive returns on a more regular basis. Including gains related to the liquidation of North American funds, our share of fund FFO was up 32.9 percent. Fund fees increased 20.6 percent, excluding the incentive returns noted above.

During 2006, we leveraged our strong financial position to access both public and private debt and equity on favorable terms. We enhanced our financial flexibility by increasing our multi-currency global line of credit to $3.4 billion, from $2.6 billion, and placed $1.65 billion of global senior unsecured notes.

The successes in all three business segments helped drive a total return to our shareholders of 34 percent.

Simon owns or has an interest in 322 properties in the U.S. comprising 244 million square feet of GLA in 41 states plus Puerto Rico. We also have an interest in 49 European shopping centers in France, Italy and Poland; six Premium Outlet centers in Japan; and one Premium Outlet center in both South Korea and Mexico.

Financial Highlights For Two Years (USD’million)

(Source: DBS Vickers & others)

(a) Types of REITS:

(b) Geography Of REITS:-

The compound annual growth rate of the market from 2002 to 2006 was 25.5%

The countries examined in this year’s report are: the United States; Canada; France; Belgium; the Netherlands; South Africa; Australia; New Zealand; Hong Kong; Japan; Malaysia; Singapore; and South Korea.

Among the key findings in the report:

1. Among the 13 major REIT markets examined, the total number of public REITs is now 484 worldwide. Despite a recent and continued trend toward privatizing public REITs, the United States is the largest REIT market with 253 public REITs.
2. The market capitalization of the 484 REITs tracked in the report totals US$608 billion with the United States accounting for US$395 billion. Including leverage (gearing), the value of the assets held by the 484 REITs totals in excess of US$890 billion.
3. A few of the world’s lesser known and smaller REIT markets outperformed their more high profile peers.New Zealand’s REIT market outperformed the rest of the world in terms of total rate of return in the last year with a 24.6% average rate of return among the country’s six REITs.
4. South Africa, home to just seven public REITs, was top performer in terms of total rate of return over a three year period (34%) and also performed strongly in the last year (23%). South Africa’s REITs achieved these returns despite having the second lowest level of leverage among the 13 markets analyzed (16.7%).
5. Hong Kong matched the much larger market in terms of average volume of trade per listed REIT in the first nine months of 2006 with both countries’ markets posting more than US$2 billion in average trading volume per REIT
6. Japan was by far the largest Asian country in terms of total volume of REIT trading and ranked third overall with US$20.2 billion in trading volume in the first nine months of 2006, ahead of more established REIT markets such as the Netherlands,Canada and France
7. The majority of REITs in Asia and EMEA are trading at a premium of 5.8% to 14.6% on their assets. Both South Korea and Malaysia have very low (or negative) premiums to net assets, making them two countries where significant opportunities exist in terms of potential for growth in capital invested.
8. North America’s REIT markets — the United States and Canada — traded at a significant higher ‘beta’ (ie were more volatile) than all other markets indicating that, in North America at least, REIT stocks react more in tandem with the broader equities market.
9. The report also surfaced a major challenge for the global REIT industry and for those analyzing REIT performance — financial comparability. Most notably, the thirteen countries examined in the report currently use several different accounting methods — from US Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards IFRS and even local accounting practices, such as still used in New Zealand. These differing tax and regulatory requirements, says the report, makes it challenging to compare true financial performance.
10. As the REIT industry grapples with the issue of what constitutes a comparable earnings measure, Ernst & Young said in the report that it expects to further develop the report in future years to accommodate these changes and draw more direct comparisons between the financial performance of REITs around the world.