US Industrial REITs Top Performer

WASHINGTON, DC-US REITs outperformed the broader stock market in April, as well as for the first four months of 2012 and for the 12 months ended April 30, reassuring investors after a less-than-stellar Q1.

On a total return basis, the FTSE NAREIT All REITs Index gained 2.80% in April. The FTSE NAREIT All Equity REITs Index gained 2.67%. That compares with a 0.63% loss for the S&P 500.

Year-to-date through April 30, the total return of the FTSE NAREIT All REITs Index was up 13.50% and the FTSE NAREIT All Equity REITs Index was up 13.44%. For the same period, the S&P 500 posted a gain of 11.88%.

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On a 12-month basis through April 30, the total return of the All REITs Index was up 8.69% and the All Equity REITs Index was up 8.71%. The S&P 500 gained 4.76%.

All in all, it was a reasonably good month for REITs, NAREIT vice president of research and industry information Calvin Schnure tells “The S&P struggled a bit on macroeconomic news,” he says. “It is not surprising, though, that REITs would do better: commercial property, by its nature, is a long-lived asset and is not as reactive to short-term economic events.”

REITs, though, certainly react to long-term shifts and that is what is happening now, Schnure says. “So far, the economic recovery has been a demand-side story. But we’re now seeing a shift to the supply side and those sectors that own supply-related assets are beginning to benefit.” Industrial REITs, for instance, are flourishing in large part due to this shift in the economy, Schnure says.

NAREIT reports that the industrial sector is the top performing asset class year-to-date with a 23.24% total return. The retail sector followed, with a 19.5% total return (regional malls returned 21.85% and shopping centers, 17.13%). The office sector gained 13.85%, and the apartment sector returned 9.85%.


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