Earlier in Part 1, to evaluate a REIT, we need to know what the REIT owns.

This Part 2 deals with WHERE are REIT’s assets being located.

Generally,REITs tend to follow a strategy of either:

• geographical diversity or
• focus

(a) Geographical diversity is when a REIT owning offices situated all over US, Australia, UK, New Zealand ( or in a country alone)whilst

(b) Focus would mean that the REIT will only FOCUS its properties in one country or one area.

Geographically focused REITS depend heavily on local economic conditions and are therefore riskier REITS compared to the geographically diversified competitors.

Incidentally, REITS would attempt to follow strategy (a) or (b) so as to achieve benefits of scale. Benefits of scale include greater negotiating power with vendors and the ability to offer tenants more choices and lower prices

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