Real Estate Investment Trusts (REITs): A Guide for International Investors

Real estate investment trusts offer internationally mobile investors a way to access property returns without the management headaches, large capital commitments and illiquidity associated with direct ownership. For expats and global investors who want real estate exposure across multiple countries and property sectors, listed REITs provide a level of convenience and diversification that is difficult to replicate through any other means. This guide explains how REITs work and how to use them effectively.

What Is a REIT?

A Real Estate Investment Trust is a company that owns, and usually operates, income-producing real estate. REITs were first established in the United States in 1960 and have since been adopted in over 40 countries, including the UK (since 2007), Australia, Japan, Singapore, France, Germany, the Netherlands, Canada and many others.

The key structural feature of a REIT is its tax treatment. REITs pay no corporation tax on the income and gains from their qualifying property rental business, provided they distribute at least 90% of that income to shareholders. This "pass-through" of tax means that investors are taxed as if they held the underlying properties directly, rather than being subject to the double taxation that would otherwise apply to a company owning property and paying dividends.

This structure makes REITs uniquely efficient for income investors — the rental yield of the underlying property passes through to the investor with minimal tax leakage at the corporate level.

UK REITs: How They Work

UK REITs are listed on the London Stock Exchange. They must:

• Have at least 75% of assets in qualifying property rental businesses
• Derive at least 75% of profits from qualifying property rental
• Distribute at least 90% of qualifying property income to shareholders
• Not be a close company (broadly, not controlled by five or fewer persons)

For investors, UK REIT dividends are split into "property income distributions" (PIDs), which are taxed as UK property income, and ordinary dividends, taxed as regular dividends. Non-resident investors receiving PIDs from UK REITs are subject to 20% withholding tax (which may be reduced under a double tax treaty).

UK-listed REITs cover a wide range of property sectors including industrial and logistics, retail, offices, student accommodation, healthcare, self-storage, care homes, and specialist sectors such as data centres and life sciences facilities.

Notable UK REITs as of 2026 include:

• Segro: Largest UK REIT by market capitalisation; industrial and logistics across the UK and Europe
• LondonMetric Property: Urban logistics and long-income assets
• Tritax Big Box REIT: Large-format distribution warehouses for major retailers
• Warehouse REIT: Multi-let industrial estates
• Primary Health Properties: GP surgeries and primary healthcare assets on long NHS-backed leases
• Assura: Similar healthcare focus to PHP
• Supermarket Income REIT: Freehold supermarket assets on long leases
• Workspace Group: Flexible office space in London

Global REIT Markets

For internationally mobile investors with multi-currency portfolios, the global REIT universe offers exposure to property markets worldwide.

United States: The US has by far the largest REIT market globally, with over $1 trillion of listed market capitalisation. US REITs cover a vast range of specialised sectors including data centres (Equinix, Digital Realty), cell towers (American Tower, Crown Castle), self-storage (Public Storage, Extra Space), healthcare (Welltower, Ventas), and industrial (Prologis). US REITs withhold 30% on dividends to non-US investors (reducible by treaty).

Australia (A-REITs): A mature, sophisticated market with major listed trusts in retail, office, industrial and diversified categories.

Singapore (S-REITs): One of Asia's most developed REIT markets, with extensive regional exposure across Southeast Asia. Singapore REITs have a 10% withholding tax on distributions to non-residents.

Japan (J-REITs): The largest REIT market in Asia outside the US; offers exposure to the Japanese property market including logistics, retail and residential.

European REITs: Continental European REIT regimes (Germany, France, Netherlands) offer exposure to markets with different characteristics from the UK.

How to Invest in REITs from Abroad

Listed REITs are traded on stock exchanges like ordinary shares and can be purchased through:

International brokerage accounts: Platforms such as Interactive Brokers, Saxo Bank and specialist multi-currency brokers allow non-resident investors to buy listed REITs across multiple exchanges from a single account.

Offshore investment bonds: REITs held within an offshore bond wrapper can be managed with deferred UK tax and simplified estate planning, depending on your residency and tax position.

REIT ETFs and index funds: Rather than selecting individual REITs, many investors use diversified REIT ETFs to access the asset class. Global REIT ETFs track indices such as the FTSE EPRA Nareit Global Developed Index, providing exposure to hundreds of REITs across multiple countries.

UK ISA: UK residents (including returning expats) can hold REITs within an Individual Savings Account for tax-free income and growth, though ISAs are not available for new contributions during periods of non-UK residency.

Tax Treatment for Non-Resident Investors in UK REITs

Non-UK resident investors in UK REITs face two categories of distribution:

Property Income Distributions (PIDs): Subject to 20% UK withholding tax. Many double tax treaties reduce this rate — for example, treaty rates of 15% apply to some countries. PIDs received by non-residents must be reported to HMRC if they are above the personal allowance threshold (where available).

Ordinary dividends: Treated as regular dividends for UK tax purposes. For non-residents, these are typically not subject to additional UK withholding beyond the standard income tax deducted at source.

Capital gains on disposal: Non-resident investors disposing of UK REIT shares are not generally subject to UK CGT on the gain (unlike direct property ownership), because REIT shares are treated as securities rather than property interests for most non-residents. This is a meaningful advantage over direct property ownership.

REITs vs Direct Property: The Key Trade-offs

For internationally mobile investors deciding between direct property and REIT investment, the key dimensions are:

Factor	Direct Property	REITs
Liquidity	Low — months to sell	High — can sell same day
Leverage	Available but complex for non-residents	Built into REIT balance sheet
Diversification	Single assets, single location	Hundreds of properties, multiple sectors
Management burden	High	None — professionally managed
Tax efficiency	Section 24 for individuals; CGT on disposal within 60 days	No Section 24; CGT may not apply on shares
Income visibility	Variable	Regular, mandated distributions
Capital requirement	Typically £100,000 minimum	Can start from £1

REIT Risks

REITs are not without risks. Key factors to understand:

Valuation and interest rate sensitivity: REITs are sensitive to interest rate movements. When rates rise, the capitalisation rate applied to property income also tends to rise, reducing asset values. The 2022–2023 rate-hiking cycle saw many UK and global REITs fall 30–50% from their 2021 peaks. As rates have stabilised in 2026, the sector has partially recovered.

Sector-specific risk: Individual REITs concentrated in challenged sectors (secondary retail, traditional offices) have underperformed structurally. Sector selection matters.

Management quality: Like any company, REIT performance depends heavily on management decisions around acquisitions, disposals, debt management and capital allocation.

Leverage: Most REITs use debt to finance their portfolios. Excessive leverage — loan-to-value ratios above 40–50% — increases the risk of covenant breaches and forced asset sales during downturns.

Incorporating REITs Into an International Portfolio

For a globally mobile investor, a well-constructed allocation to global REITs might include:

• Core exposure through a low-cost global REIT ETF (e.g., tracking the FTSE EPRA Nareit Developed Index)
• Tactical exposure to specific sectors showing strong fundamentals (logistics, healthcare, data infrastructure)
• Geographic balance across UK, US, Asia-Pacific and European REIT markets
• Regular income distribution contributing to a diversified passive income stream

REIT allocations of 5–15% of a diversified portfolio are common among international investors seeking income and real estate diversification without the illiquidity of direct property.

How Global Investments Can Help

Global Investments helps internationally mobile clients build multi-asset, multi-currency investment portfolios that incorporate real estate exposure efficiently — whether through listed REITs, property funds, or direct ownership depending on capital scale, tax position and liquidity requirements.

Our team can assess the optimal route to property allocation for your specific circumstances, taking account of your residency, tax status, other assets and investment objectives. Contact us for a no-obligation consultation.

General information only; not personalised investment advice. REIT values and distributions can fall as well as rise. Past performance is not a guide to future results. Tax treatment depends on individual circumstances. Seek professional advice before investing. As of 2026.