REITs are required to pay out 90 percent of their taxable income in the form of a shareholder dividend. Due to this requirement, REITs tend to be among those companies paying the highest dividends. The dividends come primarily from the relatively stable and predictable stream of contractual rents paid by the tenants that occupy REITs' properties. These dividends provide an attractive source of income for investors seeking high-income investments, while also providing the opportunity for growth in share price and reducing share price volatility. The chart above illustrates that REITs, as represented by the NAREIT Equity REIT Index, have earned an average annual total return of 13.6 percent, with approximately 8.2 percentage points coming from dividends paid to shareholders.

Source:NAREIT

Industrial Expansion With the addition of 10 new countries to the European Union, industrial REITs like ProLogis (NYSE: PLD) and AMB Property Corporation (NYSE: AMB) are looking to further expand their global horizons by tapping into the opportunities these central European countries will provide. Industrial REITs are already on the front lines of global REIT expansion. According to Steve Meyer, president and chief operating officer-Europe at ProLogis, the EU is now comprised of 25 countries totaling a population of 450 million, which is roughly 20 million more than in North America. "The European market is a big market. With 10 new countries it gives us a reason to reconfigure and re-examine how we serve Europe," Meyer says. ProLogis currently operates in several European countries such as Poland, Spain, France and the U.K. Guy Jacquier, chief investment officer at AMB (which has a strong presence in The Netherlands, Germany and France), says that the additional Central European countries will change how distribution is conducted and will enhance east to west trade flows in Europe. As a result, there will be a need for more distribution facilities. Part of that need comes from an increase in goods from Asia to Europe. According to Jacquier, with goods coming into the west coast of Europe the cargo is most likely to be stored in Central Europe. Meyer says that another benefit of distribution centers in central Europe is the attractiveness of labor costs. "There is a qualified, educated labor supply in Europe that is very cheap," Meyer says. Jacquier adds that these central countries are the "Mexico of Europe," which equates to lower cost of labor and production. Because Hungary, Poland and the Czech Republic have some of the lowest labor costs within this region, Meyer says those three stand to benefit the most from the expansion.