EUROPE - Dow Jones has indicated it will roll out a Real Estate Investment Trust index for Europe as soon as it believes the market is mature enough.
Lars Hamich, managing director of STOXX, said: “As soon as there are more companies available on exchange, you will definitely see a REIT index from us in Europe.”
Hamich said the REITs market in Europe was not yet developed enough for a REIT index, however it was only a matter of time. “Unfortunately in Europe, there aren’t enough REITs companies because the concept is not really signed off on in all the different countries,” he said. “In terms of weighting, close to 50% of the entire Australian market is REITs, so it’s almost like a normal sector, it’s almost mainstream in Australia.”
At the end of June, the index provider launched Dow Jones Australia LPT Index, which tracks the performance of the Listed Property Trust (LPT) securities traded on the Australian Stock Exchange.
The index is a blue chip REIT index which underlies the futures contract in Australia andwas developed in conjunction with the Sydney Futures Exchange and Atchison Consultants, a property asset consultancy firm.
Hamich added: “This is something that has some growth potential going forward. We do already have a real estate index [in Europe] that’s been out there for a couple of years and that’s close to REITs... it has similar features but it doesn’t have all the advantages.”
The Dow Jones Australia LPT Index is designed to underlie investment products, and allow investors to participate in the performance of the Australian real estate market.
Meanwhile, Hamich said markets that have in the past been seen as niche markets, like sectors, were fast becoming mainstream across the globe.
“If you look for example at the ETF market in Europe, and if you look at the growth rates, the overall ETF market last year grew 50% and this year to date it’s 37%,” he said.
“If you look at the sectors last year, [growth] was close to 60%, this year it’s 45% so it’s growing faster than the overall market.”
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