REITs campaign group Reita has emphasised that real estate investment trusts can provide retail investors with new opportunities to invest in commercial property. Reita comments follows a statement by F & C AM, which claimed that REITs 'will not provide a substitute for investing in property directly'.

REITs campaign group Reita has emphasised that real estate investment trusts can provide retail investors with new opportunities to invest in commercial property. Reita comments follows a statement by F & C AM, which claimed that REITs 'will not provide a substitute for investing in property directly'.

A number of important property funds have significant holdings in the first nine UK companies converted into REIT status on January 1, and fund managers are warning this will not result in a direct increase in returns for investors. Killik & Co advises investors to sell and look overseas for their real estate exposure as it feels that yields on UK commercial property are poor and investors are not compensated for the additional risk that they are taking on.

However, the London Stock Exchange’s chairman Christopher Gibson-Smith said Thursday that he is 'confident that the result will be cheaper capital-raising for companies, and more opportunities for investors.' At the opening of the London stock market, senior figures from the UK property industry gathered to celebrate the starting of the UK REIT regime and the launch of the new UK REIT index.

'With a total of 16 companies having already converted to REITs or confirmed their intention to convert, and a dedicated new index, UK REITs have got off to a good start as an asset class,' added Christopher Gibson-Smith.

The new index forms part of the FTSE EPRA/NAREIT Global REITs and Non-REITs Index Series. The index is currently composed of the nine companies that have already converted to REITs. Calculation commenced on January 2.