This
paper analyzes the
impact of the proposed REIT on the U.K. commercial
real estate market and the benefits that they can provide the investing community. In view of its dynamic nature and complicated
taxation and legal issues, it is necessary to make a thorough investigation of all pros and cons of REIT before the U.K. authorities go ahead with implementation. The U.S. is perhaps the most advanced market for REIT in terms of size, growth, and sophistication. A few countries, such as Germany, the Netherlands, Australia, Japan, Singapore, and Korea have REIT structures, and many of them are quite successful. The paper examines the impact of REIT on the U.K. market by analyzing the REIT mechanisms in the U.S. and other nations, such as Australia and Japan. The successful evolution of REIT in the U.S. is traced from its early years, and the impact of favorable legislation to the
success of investment vehicles is highlighted. The paper explores the taxation and legal implications for REIT under the present taxation regime in the United Kingdom. The paper considers the different forms and structures of REIT and highlights the advantages and disadvantages from the viewpoint of returns for the investors. The paper also stresses the importance of tax-efficient and investor-friendly policies in determining the success of the REIT. The paper concludes that the U.S.-styled REIT will have a favorable impact on the commercial real estate market in the U.K., and the paper recommends that REIT be introduced as soon as possible due to growing investor interest in real estate. The paper makes specific recommendations as to the manner in which REIT should be introduced in the U.K.. Table of Contents 1. Introduction 2. Hypothesis 3. Theoretical Framework for REIT 4. Research & Hypothesis Testing - REIT in the US - Proposed REIT Structure in the UK - Critical Success Factors for REIT in the UK - Taxation Issues in REIT - REIT in Japan - REIT in Australia 5. Conclusions and Recommendations 6. Appendix 7. Bibliography
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