Reits appear to have two key factors i) they are not residential (yet) investments and therefore as commercial property investment vehicles are tied to the performance of the economy (where as residential property is a very different beast that is different from stocks) ii) they are great for people who want an income coupled with property exposure - so great for the 60+ year old who want an alternative to an annuity. My strategy is i) to wait until I can buy pure residential REITS and ii) wait until I'm too old to want to captial growth and more interested in income. So, not for me - or at least, not for a while. Cheers Neil

I've just had a quick look at the performance of some of the property companies that have converted to REITs status. Most of them have had an impressive run up over the last few years. (e.g. Great Portland Estates has roughly trebled in 3 years.) I wonder how much of this has been as a result of the anticipation of the conversion to REITs. It's a bit early to see how things will progress from here.

Does anyone know more about this, and could advise?

All very interesting but where's the gearing? Most of us property investors are attracted by the concept of other people (tenants) paying our interest payments and letting us gear up and benefit from a multiple of the underlying price movement (of course it can work both ways!) If anyone knows of any other investment vehicle that allows us to do that please let me know.

Hi Will REITS are allowed to gear - but at lower LTVs than you or I can as individual investors. Hence, you would expect lower returns in a healthy market - but a more secure (less risk of a cashflow crisis/ bankruptcy) - or at least that is the idea. So, if you want cap growth and lots of it - then REITS are not likely to be right. That's my opinion anyway. Cheers Neil

Dear Minsk Apologies for my late reply. It is indeed a widely held belief among City analysts that share prices for some large property companies did rise in anticipation of REIT status, but that this rise occurred in the three or so months - not years - leading up to conversion day (1.1.07). Many property companies did not - and will not - convert and they also had rising share prices. Many analysts also warn that the British REITs market is and will be immature for at least several years - and lack of maturity means investors should be extra cautious. RL