Compiled by Kyle Fishburn

Brazil By Phil Britt

REIT legislation established: 1993, Fundos de Investimento Imobiliário (FII)
Regulating body: Brazilian Stock Exchange Commission
Number of listed companies: 65
State of current market: FIIs are analogous to a REIT, but are funded through private capital rather than public markets. FIIs are special-purpose entities used to own and operate property investments.

Investment in FIIs has gained some momentum as Brazilís hyper-inflation has gone down in the last few years. The 13 percent inflation of 2002 was down to 3 percent by the end of 2006, and the recent stabilization of inflation and interest rates has led to the emergence of a middle class that can afford to purchase property. As a result, there's been a development boom and more foreign capital coming into the country. Brazil is now a more stable investment than many Eastern European countries, though it has yet to reach par with Western Europe and the United States.

Canada By Phil Britt

REIT legislation established: 1994
Regulating body: Canadian Ministry of Finance
Number of listed companies: 28
State of current market: Due to rising interest rates, an increase in REIT privatizations and recent legislation that inhibits hotel and senior REIT joint ventures, growth in the Canadian REIT market has stalled. Valuations are high, and there is strong market competition for the acquisition of commercial property assets.
Legislative Actions: Legislation passed by Canadian Parliament in June 2007 included tax provisions that deter hotel and senior living REITs from maintaining their REIT status without separating management from physical property ownership. The new legislation views hotels and senior living properties as active businesses rather than businesses receiving rents. Scheduled to take affect by 2011, the changes also require that 75 percent of a REIT’s income must come from rents, mortgages or gains from the sale of real property situated in Canada.

Source: FTSE EPRA/NAREIT Global Real Estate Index as of Jul. 31, 2007.

Costa Rica By Phil Britt

REIT legislation established: 2000, Real Estate Investment Funds (REIF)
Regulating body: Superintendencia General de Valores
Number of listed companies: None
State of current market: Costa Rica does not have REITs, though REIFs are similar. Established in January 2000, REIFs are collective investment instruments for use in real estate and related opportunities, potentially producing high fixed returns to their investors through long-term leases.

REIFs are attracting interest due to tax advantages as well as macroeconomic and political factors. REIFs qualify for a 5 percent capital gains rate, far below the 30 percent individual income tax rate. The country’s residential and resort developments are particularly strong. Cost of living and the cost of beachfront property are lower than for other Latin American countries.

Costa Rica's economic stability has encouraged some U.S.-based lenders to back certain real estate developments, but the late summer credit crunch in the United States was expected to weaken U.S. foreign investment despite the Costa Rican governmentís and economic authoritiesí active marketing to attractive investors, particularly U.S. retirees and people looking for vacation homes.

Mexico By Alison Landa

REIT legislation established: 2004, Fideicomisos de Infraestructura y Bienes Raices (FIBRA)
Regulating body: Bolsa Mexicana de Valores (BMV), Mexican Stock Exchange
Number of listed companies: 1
State of current market: Mexico continues to prove prime growth territory for southward expansion of U.S. REITs. This interest has deepened due to Mexico’s banking reforms and stable currency over the last few years.
Legislative Actions: The expansion of Mexico’s real estate markets spurred lawmakers to modify FIBRA legislation. On Jan. 1, 2007, the Mexican Income
Tax Law was effected, with provisions requiring a trust to have at least 10 investors, and that individual investors are prohibited from holding more than a 20 percent interest in any trust. Legislation has also been enacted to clarify the purpose of Mexican REITs as being the purchase or construction of immovable property to be leased for a minimum of four years before sale.

The modified legislation requires 70 percent of a REIT’s assets must be used for the purpose of acquiring, leasing or selling real estate, while the rest must be invested in shares of government securities.