REITs are frequently considered as an investment opportunity for Institutional investors due to the above the average returns offered with respect to other financial instruments. Due to the specific characteristic of the real estate market normally geographically specialized REITs (home biased) can benefit from an higher quality of the information available for selecting among investment opportunities and from a reduction of the cost of monitoring and servicing of assets owner. Home Biased REITs could be particularly appealing for such type of investors because the opportunity to add this type of asset to an investment portfolio already diversified can allow to optimize the risk-return of their investment strategy. 

The paper considers all the REITs included in the Standard and Poor’s Global REIT Index and evaluates the percentage of investment released by institutional investors and their change over time. Focusing the attention on REITs’ international real estate exposure, the paper shows that the geographical diversification matters for the investment decisions made by international investors and results are robust with respect to the time horizon considered and the proxy used for the concentration of the ownership.