Real estate groups around the world join together.

By Allison Landa

As REITs continue to expand and conduct business on a global scale, members of the Real Estate Equity Securitization Alliance (REESA) have joined forces in working toward a more hospitable business climate for securitized real estate. The includes seven organizations that have come together to promote the interests of REITs and publicly traded real estate companies worldwide. REESA members also plan jointly to develop common messaging to promote the benefits of REIT investment to global institutional investors.

However, REESA is not a separate incorporated entity. “It’s not a ‘United Nations’ of real estate. It’s very much a star alliance,” says Trevor Cooke, the executive director of Property Council of Australia’s (PCA) international and capital markets division. “This group of organizations is cooperating by sharing information and leading-edge research.”

Trevor Cooke

Moreover, “by spending time together, REESA is forming strong relationships that allow them to work effectively together on an increasing number of common goals,” says Bonnie Gottlieb, vice president, industry and member affairs for NAREIT, and REESA coordinator.

Members of the alliance include the Asian Public Real Estate Association (APREA), the Association for Real Estate Securitization (ARES) in Japan, the British Property Federation (BPF), the European Public Real Estate Association (EPRA), the National Association of Real Estate Investment Trusts (NAREIT®) in the U.S., the PCA and the Real Property Association of Canada (REALpac).

In November 2006, the group held its first meeting in conjunction with NAREIT’s 2006 Annual Convention in San Francisco. Since then, REESA has held two subsequent gatherings: one in June preceding NAREIT’s REITWeek: 2007 Investor Forum® in New York City and another in September before EPRA’s 2007 annual conference in Athens. The group plans a meeting in Seoul to coincide with the APREA Property Leaders’ Forum in April 2008, then in Tokyo in September 2008 before ARES’ Investor Forum.

Come Together

“REESA was formed at the initiative of these associations, which have two common issues to lobby to global bodies,” says S. Michael Brooks, executive director of REALpac. “The first item is global accounting standards as they affect real estate under the control of the International Accounting Standards Board (IASB).”

S. Michael Brooks

He says that the other is global taxation of cross-border investment in and by REITs. REESA is supporting the development of a model bilateral tax treaty to specifically address this issue, working in conjunction with the Organisation for Economic Co-Operation and Development, a Paris-based organization of 30 countries that share information on economic and social development.

Cooke adds that there are public policy interests affecting all members of REESA, particularly regarding the international tax and financial reporting situations.

Accounting Matters

BPF Chief Executive Liz Peace says working closely with the IASB is one of REESA’s main goals. “We all felt that the needs of the real estate industry had not been taken sufficiently into account, and there are potential concerns that could cause some problems,” Peace says, referring to projects such as how real estate leases are treated on financial statements. “We recognized that individually we might have difficulty making our point, but collectively we are a force that could not be ignored.”

Liz Peace

Peace says that REESA made valuable contributions to IASB’s deliberations and earned a reputation for providing constructive input. Additionally, she says the group is interested in taking an international view on topics concerning sustainability. The Australian, British and Canadian members have agreed to lead a REESA initiative to formulate ideas on international sustainability reporting standards.

Future Goals

Brooks says that although the group’s original goals were to broaden interest and push accounting and REIT cross-border tax initiatives, the original mandate has expanded as REESA’s members discover additional interests in common.

“With all of our respective members increasingly looking around the world for investments, REESA is facilitating cross-registrations in each others’ conferences, developing a real-estate-as-investment global communications plan and possible Web site, as well as sharing research on portfolio theory and corporate social responsibility,” Brooks says.

However, Peace notes that the group recognizes the impossibility of standardizing all elements of the REIT universe. “There will always be certain issues within real estate investment that can only be handled on a national basis,” she says. “However, there are several subjects that require a global approach, not only because real estate is a global business, but because cross-border ownership and investment continue to increase.”