Frost & Sullivan: Increased Demand for Rental Housing Drives Global Residential Real Estate Investment Trusts

Key profitability ratios such as return on equity and EBITDA margins expected to witness an increase

Jan 14, 2014, 07:53 ET from Frost & Sullivan

MOUNTAIN VIEW, Calif., Jan. 14, 2014 /PRNewswire/ -- Higher interest rates, rising house prices, better employment ratios, and reluctance to own houses due to prior foreclosures, are pushing up the demand for rental housing. This is opening up opportunities for residential real estate investment trusts (REITs) globally. Rent growth and decreasing vacancy rates will further boost the profitability of REITs.

New analysis from Frost & Sullivan (http://www.financialservices.frost.com), Global Residential REIT Industry, based on a study of 108 REITs, reveals the market earned revenues of $23.23 billion in 2012. Key profitability ratios such as return on equity and earnings before interest, taxes, depreciation and amortization (EBITDA) margins rose in 2012, and this trend is expected to continue.

For more information on this research, please email Liz Clark, Corporate Communications, at liz.clark@frost.com, with your full name, company name, job title, telephone number, company email address, company website, city, state and country.  

"North American companies dominate the list of top performers in the global residential REIT industry, which is not surprising given that they have been in the industry longer than their European and Asian counterparts," said Frost & Sullivan Financial Analyst Bharath Meenakshi Sundaram. "In the next three to five years, however, countries such as Australia, France and Belgium are expected to witness more activity in this industry."

Successful companies in the REIT domain follow several best practices. One key factor is selecting the right location and properties for acquisitions. Leading firms have in-house acquisition teams that are always on the lookout for properties that are located in areas with easy access to workplaces, schools and retail markets.

Moreover, some organizations pass on only sustainable increases in lease rates in order to maintain a lower tenant turnover. By doing so, they also build a sense of community around their brand. Customer service, including having a 24-hour call center, maintenance of apartments, and seasonal requirements such as regular clearing of snow, play a key role in retaining tenants and maintaining higher occupancy rates.

Global Residential REIT Industry is part of the Business and Financial Services subscription. Frost & Sullivan's related research services include: Geographic, Technological, and Financial Portfolio Analysis of Top 30 Fastest-growing Automotive Suppliers, Funding Patterns in the Power Systems Industry, Analysis of North American and European Healthcare REITs Industry, Analysis of the Socially Responsible Investing Funds Market, and Funding Patterns in the Global Energy Industry. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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Global Residential REIT Industry
NC8F-F1

Contact:
Liz Clark
Corporate Communications – North America
P: 210. 477.8483
F: 210.348.1003
E: liz.clark@frost.com

http://www.frost.com

 

SOURCE Frost & Sullivan



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