U.S. real-estate investment trusts continue to enjoy advocacy

What makes U.S. real-estate investment trusts (REITs) commendable amid this period of acute crisis? Well, there are many but according to the discretion of ING Real Estate their aggressiveness to repair own balance sheets has been striking without a shred of doubt and this has been the main reason for them to earn strong investor support although the existent downturn has almost ravaged the market. It is to be noted that U.S. REITs market is among the world’s most favorable for institutional investors, which is competent to raise equity at discounts of only 7-8 percent on current share prices, compared with 40-50 percent discounts in Australia, the UK and Singapore.

ING Real Estate is well-known to invest in, finance and develop quality real estate in all major global markets. In addition, with a total portfolio of EUR 100 billion, the company ranks among the foremost global real estate companies, serving a broad client base from its offices in Europe, North America, Australia and Asia.

The ING Real Estate also made it clear that in the international arena REITs are tapping stock markets to strengthen their balance sheets as property values fall and the world sinks into recession. Nevertheless U.S. trusts have reacted aggressively by means of raising enough funds to cover years of debt repayments. U.S. REITs, apart from this, have also placed most new issues with key investors, leaving only a minority of shares left over for a wider offering, said Chris Reich, portfolio manager for ING Clarion Real Estate Securities, part of ING Real Estate.

Speaking on this, Chris Reich told a media briefing, “Typically, what they will do is bring several key shareholders over the wall, and try to lock up 70 to 80 percent of that placement in advance of making it more globally available.” “That’s allowed them to offer a much smaller discount.” U.S. REITs have also sold assets which, along with the funds raised from share issues, have generated enough capital to cover debt maturities stretching out to 2011 and 2012, he said.