<PAGE>
SECURITY CAPITAL REAL ESTATE MUTUAL FUNDS INCORPORATED
SECURITY CAPITAL EUROPEAN REAL ESTATE SHARES
Supplement dated December 31, 1998
to
Class I Prospectus and Statement of Additional Information dated August 19, 1998
GCMG HAS COMMITTED TO CONTINUE TO WAIVE FEES AND/OR REIMBURSE EXPENSES
TO MAINTAIN SC-EURO'S CLASS I OPERATING EXPENSES, OTHER THAN BROKERAGE FEES
AND COMMISSIONS, TAXES, INTEREST AND OTHER EXTRAORDINARY EXPENSES,
AT NO MORE THAN 1.45% OF SC-EURO'S CLASS I AVERAGE DAILY NET ASSETS FOR
THE YEAR ENDING DECEMBER 31, 1999.
EFFECTIVE JANUARY 1, 1999, SECURITY CAPITAL REAL ESTATE ARBITRAGE SHARES
AND SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES WILL NO LONGER BE
OFFERED AS INVESTMENT PORTFOLIOS OF SC-REMFS AND WILL BE TERMINATED.
ACCORDINGLY, SC-EURO CLASS I SHARES MAY NOT BE EXCHANGED FOR
THE CLASS I SHARES OF SC-ARBITRAGE OR SC-ASIA ON OR AFTER THAT DATE.
<PAGE>
SECURITY CAPITAL REAL ESTATE MUTUAL FUNDS INCORPORATED
SECURITY CAPITAL EUROPEAN REAL ESTATE SHARES
Supplement dated December 31, 1998
to
Class R Prospectus and Statement of Additional Information dated August 19, 1998
GCMG HAS COMMITTED TO CONTINUE TO WAIVE FEES AND/OR REIMBURSE EXPENSES
TO MAINTAIN SC-EURO'S CLASS R OPERATING EXPENSES, OTHER THAN BROKERAGE FEES
AND COMMISSIONS, TAXES, INTEREST AND OTHER EXTRAORDINARY EXPENSES,
AT NO MORE THAN 1.60% OF SC-EURO'S CLASS R AVERAGE DAILY NET ASSETS FOR
THE YEAR ENDING DECEMBER 31, 1999.
EFFECTIVE JANUARY 1, 1999, SECURITY CAPITAL REAL ESTATE ARBITRAGE SHARES
AND SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES WILL NO LONGER BE
OFFERED AS INVESTMENT PORTFOLIOS OF SC-REMFS AND WILL BE TERMINATED.
ACCORDINGLY, SC-EURO CLASS R SHARES MAY NOT BE EXCHANGED FOR
THE CLASS R SHARES OF SC-ASIA ON OR AFTER THAT DATE.
<PAGE>
SECURITY CAPITAL REAL ESTATE MUTUAL FUNDS INCORPORATED
SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES
Supplement dated December 31, 1998
to
Class I Prospectus and Statement of Additional Information dated August 19, 1998
EFFECTIVE JANUARY 1, 1999, SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES
AND SECURITY CAPITAL REAL ESTATE ARBITRAGE SHARES WILL NO LONGER BE OFFERED
AS INVESTMENT PORTFOLIOS OF SC-REMFS AND WILL BE TERMINATED.
<PAGE>
SECURITY CAPITAL REAL ESTATE MUTUAL FUNDS INCORPORATED
SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES
Supplement dated December 31, 1998
to
Class R Prospectus and Statement of Additional Information dated August 19, 1998
EFFECTIVE JANUARY 1, 1999, SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES
AND SECURITY CAPITAL REAL ESTATE ARBITRAGE SHARES WILL NO LONGER BE OFFERED
AS INVESTMENT PORTFOLIOS OF SC-REMFS AND WILL BE TERMINATED.
<PAGE>
SECURITY CAPITAL REAL ESTATE MUTUAL FUNDS INCORPORATED
SECURITY CAPITAL U.S. REAL ESTATE SHARES
Supplement dated December 31, 1998
to
Class I Prospectus and Statement of Additional Information dated August 19, 1998
GCMG HAS COMMITTED THAT BEGINNING JANUARY 1, 1999 THEY WILL WAIVE FEES
AND/OR REIMBURSE EXPENSES TO MAINTAIN SC-US'S CLASS R OPERATING EXPENSES,
OTHER THAN BROKERAGE FEES AND COMMISSIONS, TAXES, INTEREST AND OTHER
EXTRAORDINARY EXPENSES, AT NO MORE THAN 1.20% OF SC-US'S CLASS R AVERAGE DAILY
NET ASSETS FOR THE YEAR ENDING DECEMBER 31, 1999.
EFFECTIVE JANUARY 1, 1999, SECURITY CAPITAL REAL ESTATE ARBITRAGE SHARES
AND SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES WILL NO LONGER BE
OFFERED AS INVESTMENT PORTFOLIOS OF SC-REMFS AND WILL BE TERMINATED.
ACCORDINGLY, SC-US CLASS I SHARES MAY NOT BE EXCHANGED FOR
THE CLASS I SHARES OF SC-ARBITRAGE OR SC-ASIA ON OR AFTER THAT DATE.
<PAGE>
SECURITY CAPITAL REAL ESTATE MUTUAL FUNDS INCORPORATED
SECURITY CAPITAL U.S. REAL ESTATE SHARES
Supplement dated December 31, 1998
to
Class R Prospectus and Statement of Additional Information dated August 19, 1998
GCMG HAS COMMITTED THAT BEGINNING JANUARY 1, 1999 THEY WILL WAIVE FEES
AND/OR REIMBURSE EXPENSES TO MAINTAIN SC-US'S CLASS R OPERATING EXPENSES,
OTHER THAN BROKERAGE FEES AND COMMISSIONS, TAXES, INTEREST AND OTHER
EXTRAORDINARY EXPENSES, AT NO MORE THAN 1.35% OF SC-US'S CLASS R AVERAGE DAILY
NET ASSETS FOR THE YEAR ENDING DECEMBER 31, 1999.
EFFECTIVE JANUARY 1, 1999, SECURITY CAPITAL REAL ESTATE ARBITRAGE SHARES
AND SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES WILL NO LONGER BE
OFFERED AS INVESTMENT PORTFOLIOS OF SC-REMFS AND WILL BE TERMINATED.
ACCORDINGLY, SC-US CLASS R SHARES MAY NOT BE EXCHANGED FOR
THE CLASS R SHARES OF SC-ASIA ON OR AFTER THAT DATE.
<PAGE>
SECURITY CAPITAL REAL ESTATE MUTUAL FUNDS INCORPORATED
SECURITY CAPITAL REAL ESTATE ARBITRAGE SHARES
Supplement dated December 31, 1998
to
Class I Prospectus and Statement of Additional Information dated August 19, 1998
EFFECTIVE JANUARY 1, 1999, SECURITY CAPITAL REAL ESTATE ARBITRAGE SHARES
AND SECURITY CAPITAL ASIA/PACIFIC REAL ESTATE SHARES WILL NO LONGER BE OFFERED
AS INVESTMENT PORTFOLIOS OF SC-REMFS AND WILL BE TERMINATED.
