Ilanot Batucha launches Israel's first REIT

Ilanot launches Israel's first REIT

26.3.06 | 12:18 By Hagai Amit

Everybody has been talking about the long-awaited real estate rally, which seems to be largely confined to residential real estate at this stage. Experts are arguing over the right pricing for real estate stocks, which have risen roughly 25% from the year's start. Meanwhile the Ilanot investment group has evidently decided it can't afford to miss this bandwagon and it's launching a REIT - a real estate investment trust, the first in Israel.

But the fund launched at the end of last week isn't placing its eggs in the basket of Israeli properties. It means to invest mainly in American REITs.

REITs generally undertake to invest in commercial real estate companies, and to distribute most of their profits as dividends. They get tax breaks on their profits, as it's their investors who are liable for the tax bills.

To provide analytical services, the Ilanot REIT has recruited Ariel Even, formerly the deputy chief executive of real estate giant Gazit Globe (TASE: GLOB).

Ilanot presents its REIT as being an alternative investment to buying a 2.5-room apartment in Ramat Gan, for instance. Another phrase was that it allows the man in the street to be like the "big tycoons who invest abroad".