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March 25, 2012 at 06:53 PM
According to S&P Capital IQ, retailer sentiment is buoyant, “with sales rising, retailers expanding, and many retail REITs trading at elevated levels driven by improving operating results and relatively rich dividend yields.
As of March 20, the average shopping-center REIT had a dividend yield of 3.3%, the real-estate industry group NAREIT says, vs. 1.96% for the S&P 500. S&P Capital IQ expects shopping-center REITs touse their improving cash flows to increase dividends over the course of 2012.
“Signs that the economy is on the mend, combined with what we view as continued positive retailer sentiment and expansion plans, bode well for the sub-industry, in our view,” said S&P Capital IQ equity analyst Robert McMillan in a March 21 report.
Plus, S&P Capital IQ is forecasting that GDP will advance 2.1%, year on year, in 2012, up from a 1.7% gain in 2011, and that personal consumption will rise 2%, after a 2.2% gain in 2011. This bodes well for retail.
Data from CBRE Econometric Advisors supports this view with an outlook of absorbed retail space in the U.S. jumping to +29.4 million and +37.4 million square feet in 2012 and 2013, respectively, from -3.9 million and +2.1 million square feet in 2010 and 2011.
