The role of real estate investment trusts (REITs) in the global hotel market and potential for their development in Serbia
The role of real estate investment trusts (REITs) in the global hotel market and potential for their development in Serbia

Summary/Abstract: The research conducted for this study has shown that Real Estate Investment Trusts (REITs) own a substantial volume of hotel facilities all over the world. The funds whose shares are traded on the New York Stock Exchange (NYSE) own a total of 1,144 hotels with more than 270,000 rooms. A further portfolio analysis of these funds and the hotel brands under which they operate reveals their strong linkages to world’s largest hotel corporations. 84% of hotels owned by these REITs operate under the brand names of ten largest hotel corporations. Considering their contribution to the development of hotel capacity, it is important to assess the conditions for their development in Serbia. The current legislation in Serbia allows the establishment and operation of closed-end investment funds, but it does not allow comparable benefits to those provided in the majority of countries where REITs exist. This is primarily related to taxation. Potential investors also face the problem of inadequate liquidity in the domestic capital market which is registering a significant drop in trade. In the current global economic environment, it is unrealistic to expect the development of the REIT market in Serbia. Provided the potential regional integration of capital markets as well as the required legislative changes, for the long term it would be possible to expect the emergence and development of a regional REIT market. A part of the capital collected through REITs could be invested in hotels and contribute to the improvement of the hospitality sector in Serbia.

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