After the introduction of REITs in France and together with the beginning of the discussion in the U.K. on the topic, the German Ministry of Finance asked in May 2004 the Centre for European Economic Research (ZEW) together with the ebs Real Estate Centre of the European Business School to elaborate a report on the need and the possible regulatory framework of a German REIT. All three authors of this paper formed part of the task force which has been consulted. This paper concentrates on the analysis of the role a German REIT could play within the German property investment vehicles market, elaborates the possible market potential, formulates the necessary needs for a German REIT concerning corporate governance and taxstructure, discusses the problems of tax transparency within the tax-regime of the European Union, and gives an overview on the evolution of the introduction of REITs in Germany.