The global footprint of countries operating REIT frameworks has expanded dramatically over three decades, with those jurisdictions now representing 85% of worldwide economic output, according to data compiled by the National Association of Real Estate Investment Trusts. That share stood at just 9% in 1990, reflecting the concentrated adoption of listed real estate structures in a handful of developed markets.

Population coverage has surged even more sharply. REIT countries and regions accounted for only 6% of global population in 1990, a figure that has climbed to 63% today as the model spread into densely populated emerging economies. Asia has been the primary driver of that growth, particularly following the establishment of REIT regimes in India in 2014 and China in 2021.

The expansion reflects a broader acceptance of the REIT approach as a tool for mobilising private capital into real estate sectors while offering retail and institutional investors liquid exposure to property assets. Nareit has published a brochure addressing the benefits to economies, communities, and investors by adapting a REIT model, aimed at policymakers in jurisdictions considering the framework.

Research conducted by investment consulting firm Wilshire Associates found that an allocation to global listed real estate improved the returns of a diversified investment portfolio. The study examined the role of REITs in reducing risk and enhancing performance across a range of portfolio constructions.

Wilshire identified a particularly critical function for REITs within target date funds, which are designed to simplify portfolio planning for individuals by automatically adjusting asset allocation as investors approach retirement. The consulting firm noted that the majority of new contributions to 401(k) and IRA accounts are expected to flow into target date funds over the coming decades, making their investment performance central to the retirement security of millions of Americans.

For investors seeking exposure to global listed real estate, the most cost-efficient implementation is typically through mutual funds or exchange-traded funds that hold a diversified basket of these securities. Such vehicles provide instant diversification across geographies and property sectors while avoiding the administrative complexity of direct cross-border investment.

Cross-border allocations involving U.S. REITs face withholding tax considerations that vary by investor domicile. The U.S. tax code sets a baseline withholding rate of 30% on dividends paid by U.S. corporations to non-U.S. shareholders, a rate that applies to ordinary REIT distributions as well.

However, the United States has negotiated bilateral tax treaties with 77 countries aimed at promoting cross-border investment by lowering that standard withholding rate. The actual rate applied to U.S. REIT ordinary dividends paid to foreign shareholders depends on both the investor's country of residence and the type of investor, with different rates often applying to individuals versus corporate entities.

Nareit maintains a detailed chart summarising withholding tax rates on U.S. REIT ordinary dividends to non-U.S. shareholders, broken down by country and investor classification. The variability in treaty rates underscores the importance of tax structuring in global real estate allocations, particularly for institutional investors operating across multiple jurisdictions.