REITs: hot property?
A commissioning editor for a business book publisher is looking for someone to write a book on REITs: ‘closed-ended’ investment trusts investing in properties which (with new HMRC concessions) will be able to pass income and gains through to investors without double taxation. Was I interested? No. I don’t have the time. But hang on. This could be a very short book. So here it is.
“REITs are like quoted property shares. The similarities are more important than the differences, and that goes for the proposed tax changes too. Property shares normally behave like their host market, so they add little diversification. Lower than normal correlations with other equities in the 1990s have particular explanations so though you will hear this sales pitch it is not one you should rely on. Commercial property is currently overvalued. The end.”