Real Estate Investment Trusts (REIT) seems to be perfect lovers for casinos, as many leading Gaming Advisory firms like Union Gaming believe that it will lead to a consolidation in the world’s gambling sector.
Certain UK gambling laws, including online casino laws, reported by Solicitors Guru support the growth of industry and improve the potential for casino real estate deals.
What is REIT?
REIT is a company that owns income-producing real estates. The real estate owned can be hospitals, casinos, warehouses and so on. The law that backs REITs was introduced in 1960 by U.S. Congress.
The law intends to mimic an investment form that looks like mutual funds. REIT is a great tool used to avoid a large pile of tax because REITs are made to pay shareholders their dividends of at least ninety percent of the gross profit.
John DeCree, a Union Gaming analyst, shares the belief that REIT is here to stay. On Las Vegas Strip, there is currently over $3.5 billion of EBITDAR $1.8 billion of which is currently not owned by REITs.
It will be valued at a cap rate of 7%-8%, which is potential real estate that is worth over $25 billion. This will likely lead to a great level of growth as the years go by because of the current trend of casino REITs acquisitions and mergers.
The casino REITs that have significant growth potentials are VICI Properties, MGM Growth Properties, and Gaming and Leisure Properties.
The foremost REIT structure in the casino world is Gaming and Leisure Properties. It started when Penn National Gaming divided its realty to form Gaming and Leisure Properties REIT in 2013. MGM Growth Properties tails Gaming and Leisure Properties in the second position. As it was created by MGM Resorts International, a Las Vegas hospitality and gaming mogul in the year 2015. The aim of creating the REIT is to have the opportunity to invest in big destination resorts.
VICI Properties REIT came about two years after when Caesars Entertainment Corp. decided to transfer a part of its assets to the REIT, aiming to gain access to much better opportunities.
Casinos business continues to grow as Leisure Properties and MGM Growth Properties report a 10% growth, a Union Gaming analyst has said.