REITS Outperform Markets
Tuesday, July 13, 2010
The US real estate investment trust (REIT) industry significantly outperformed the broader equity market
in the first half of 2010, despite global economic shocks that depressed the
market in the second quarter, according to NAREIT, the National Association
of Real Estate Investment Trusts.
Both the FTSE NAREIT All REITs Index, the broadest US REIT index, and the
FTSE NAREIT Equity REIT Index were up 5.56% on a total return basis in the first
half, while the S&P 500 was down 6.65%. In the second quarter, the FTSE
NAREIT All REITs Index was down 3.66% and the FTSE NAREIT Equity REIT Index
was down 4.06%, while the S&P 500 tumbled 11.43%.
Of greater significance, over longer time frames REITs outperformed the broader
equity market by even wider margins. On a one-year basis ended June 30, the
FTSE NAREIT All REITs Index delivered a total return of 53.54%, and the FTSE
NAREIT Equity REIT Index was up 55.98%, compared to a 14.43% gain for the S&P
500.
On a 10-year basis, the FTSE NAREIT All REITs Index achieved a compound annual
total return of 10.23 %, and the FTSE NAREIT Equity REIT Index delivered 10.71%.
By comparison, the S&P 500’s compound annual total return over the
same period was a negative 1.59%.
“Through their skilled management teams, high-quality assets and strong
dividends – which over longer periods have accounted for nearly two-thirds
of total returns – REITs have consistently provided outstanding long-term
performance for their investors,” said NAREIT President and CEO Steven
A. Wechsler.
Nearly all segments of the US REIT marketplace outperformed the broader market
in the first half of 2010. However, the best performing segments were Apartments,
up 16.29%; Lodging/Resorts, up 10.76%; and Self Storage, up 9.48%.
All segments of the US REIT market handily outpaced the broader equity market
for both one-year and 10-year periods ended June 30. On a one-year basis, the
leading REIT market segments were Regional Malls, up 78.93%; Apartments, up
76.54%; and Office, up 66.04%.
On a 10-year, compound annual rate basis ended June 30, the Healthcare segment
delivered a total return of 20.11%; Self Storage delivered 17.77%; and Regional
Malls delivered 13.26%.
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