REIT Market to Grow by USD 350.2 Billion from 2024-2028, Driven by Global Demand for Warehousing, with AI Redefining Market Landscape - Technavio

REIT Market to Grow by USD 350.2 Billion from 2024-2028, Driven by Global Demand for Warehousing, with AI Redefining Market Landscape - Technavio

NEW YORK, Feb. 7, 2025 /PRNewswire/ -- Report with market evolution powered by AI - The global REIT market size is estimated to grow by USD 350.2 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 2.87% during the forecast period. Increase in global demand for warehousing and storage facilities is driving market growth, with a trend towards emergence of self-storage as a service. However, vertical integration by e-commerce companies poses a challenge. Key market players include Automotive Properties REIT, CapitaLand Integrated Commercial Trust Management Ltd., Deutsche WohnenDeutsche Wohnen SE, Dexus Group, Federal Realty Investment Trust, FIBRA Prologis, Gecina REIT SA, GPT Management Holdings Ltd., Iron Mountain Inc., Japan Real Estate Investment Corp., Klepierre Reit SA, Link Asset Management Ltd., Mirvac Group, NorthWest Healthcare Properties, Omega Heathcare Investors Inc., RioCan Real Estate Investment Trust, Segro Plc, STAG Industrial Inc., Stockland Corp. Ltd., and W. P. Carey Inc..

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Market Driver

REITs, or Real Estate Investment Trusts, are a popular investment option for those seeking income from income-producing real estate. Both publicly traded REITs and non-traded REITs allow individual investors access to commercial real estate. The SEC regulates REITs, ensuring transparency and protecting investors. Investors can add REITs to their portfolio for regular income through dividend yields. However, risks include liquidity, share value transparency, conflicts of interest, and potential fraud. Fees, taxes, and eligibility criteria are other considerations. Metro and Tier 1 cities offer high rental yields, making commercial properties attractive. Equity REITs own or finance income-producing real estate, while Mortgage REITs earn income from mortgage financing. Hybrid REITs combine both. Private REITs are only available to accredited investors. Investment returns come from dividend income and capital appreciation. Diversification through REITs can provide professional management and regular income. Taxes on dividends are taxed as ordinary income, while capital gains are taxed at capital gains rates. Investors should consult their broker or financial adviser for fees and investment options. Demat accounts and mutual funds can facilitate investment. Asset allocation and emergency liquidity are essential for portfolio management. Always read the offering prospectus carefully before investing to avoid potential fraud and understand eligibility criteria. 

Self-storage is a business solution that involves renting out spaces for storing various types of goods. The demand for self-storage facilities has increased significantly due to the expanding needs of industries such as pharmaceuticals, chemicals, e-commerce, food and beverages, automotive, electronics, and manufacturing. Self-storage facilities come in different types, including temperature-controlled and non-temperature-controlled. Climate-controlled self-storage, specifically, maintains a temperature between 60°F and 80°F to preserve temperature-sensitive products. Specialized climate-controlled containers are utilized for storing perishable items. Industries utilize self-storage for inventory management, seasonal storage, and document archiving. Self-storage services offer flexibility and convenience, making them an essential business resource. 

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Market Challenges

• REITs, or Real Estate Investment Trusts, provide investors with the opportunity to invest in income-producing real estate without directly owning or managing the property. Both publicly traded REITs and non-traded REITs allow access to commercial real estate. However, challenges exist. SEC regulation ensures transparency, but investors must consider risks like liquidity, share value transparency, conflicts of interest with brokers or financial advisers, and fees. Publicly traded REITs offer dividend yields, but taxes on ordinary income and capital gains differ. Non-traded REITs have upfront fees and potential for fraud. Investors should review offering prospectuses, understand eligibility criteria, and consider diversification, investment returns, and taxation. Metro cities and Tier 1 cities offer high rental yields, but risks and costs vary. Equity REITs focus on property income, while Mortgage REITs invest in mortgages. Hybrid and Private REITs combine elements. Investors should allocate assets, plan for emergency liquidity, and consult a financial adviser. Dividend income and capital appreciation are potential investment returns. Regular income from REITs can be received through a Demat account, similar to mutual funds. Taxable dividends should be accounted for in asset allocation and investment options.
• The global expansion of e-commerce is driving up the demand for warehousing solutions as online sales continue to rise. Major players in the industry, such as Amazon, Alibaba, JD.com, and IKEA, are responding by establishing their own warehouses to manage the increased sales volume. In November 2021, Alibaba's logistics subsidiary, Cainiao, announced plans to create a network of smart warehouses in Southeast Asia, including Vietnam, Indonesia, Malaysia, and Singapore. This network, consisting of Cainiao Hubs, will encompass a significant land area to accommodate the growing e-commerce market in the region.

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Segment Overview 

This reit market report extensively covers market segmentation by

• Type
• Industrial
• Commercial
• Residential
• Application
• Warehouses And Communication Centers
• Self-storage Facilities And Data Centers
• Others
• Geography
• North America
• APAC
• Europe
• South America
• Middle East And Africa

1.1 Industrial- The industrial segment led the global REIT market in 2023 due to rising demand for industrial space. The COVID-19 pandemic fueled e-commerce sales, necessitating more warehouse space for companies to store inventory and fulfill orders. Supply chain disruptions further increased demand for occupancy and rental rates. Additionally, e-commerce companies are setting up warehouses and fulfillment centers near metropolitan areas to meet growing consumer demand. These factors create substantial expansion opportunities for industrial REITs, contributing to market growth during the forecast period.

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Research Analysis

The REIT market refers to the investment sector that deals with income-producing real estate through publicly traded Real Estate Investment Trusts (REITs) and non-traded REITs. REITs allow investors to gain exposure to commercial real estate without directly owning or managing the properties. The SEC regulates REITs, ensuring transparency and regular income through dividends. However, investors should be aware of risks such as liquidity, conflicts of interest, fees, taxes, and fraud. REITs can be Equity, Mortgage, Hybrid, or Private, each with varying eligibility criteria and investment returns. Equity REITs derive income from rental yields, while Mortgage REITs earn returns from mortgage interest. Hybrid REITs combine both. REITs offer diversification, professional management, and regular income, making them an attractive addition to an investment portfolio. Investors should consider factors like dividend yields, investment returns, capital gains, and taxation when evaluating REITs. Consulting a broker or financial adviser can help navigate the complexities and potential risks. Remember, all investments come with inherent risks, and it's essential to understand the specific risks associated with REITs before investing.

Market Research Overview

The REIT market refers to the investment avenue that provides individuals with the opportunity to invest in income-producing real estate through publicly traded Real Estate Investment Trusts (REITs) or non-traded REITs. REITs invest in commercial real estate, including properties in Metro Cities and Tier 1 Cities, and generate income through rental yields, capital gains, and dividends. Investors should be aware of risks such as liquidity, share value transparency, conflicts of interest, and fraud. The SEC regulates REITs, and investors must consider fees, taxes, and eligibility criteria before investing. REITs come in various types, including Equity REITs, Mortgage REITs, Hybrid REITs, and Private REITs, offering different investment returns, dividend income, and capital appreciation opportunities. Diversification, professional management, and regular income are key benefits of investing in REITs. Investors can consider opening a Demat account to buy REIT units and can allocate a portion of their investment portfolio to REITs for taxable dividend income and long-term capital gains. Consulting a financial adviser or broker can help in understanding the offering prospectus, investment options, and asset allocation strategies.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• Industrial
• Commercial
• Residential
• Application
• Warehouses And Communication Centers
• Self-storage Facilities And Data Centers
• Others
• Geography
• North America
• APAC
• Europe
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

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With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio