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Portfolio > Alternative Investments > Private Equity

REITs Continue to Beat Equity Market, NAREIT Says

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U.S. REITs continued to outperform the broader equity market in July, the first seven months of 2012, as well as on a 12-month basis as of July 31, according to NAREIT. Nearly all sectors of the REIT market also delivered double-digit gains during the first seven months of the year, NAREIT says.

NAREIT reports that on a total-return basis, the FTSE NAREIT All REITs Index gained 2.30% and the FTSE NAREIT All Equity REITs Index gained 2.17% in July, while the S&P 500 rose 1.39%.

For the first seven months of the year, the FTSE NAREIT All REITs Index was up 18.08% and the FTSE NAREIT All Equity REITs Index was up 17.40%, compared to the S&P 500’s gain of 11.01%.

On a 12-month basis, the FTSE NAREIT All REITs Index delivered a 14.79% total return and the FTSE NAREIT All Equity REITs Index delivered a 13.72% gain, compared to the S&P 500’s gain of 9.13%.

NAREIT also found that nearly all sectors of the U.S. REIT market delivered double-digit gains for the first seven months of this year.

Retail was the top-performing sector with a 23.57% total return, led by the regional mall subsector with its 25.11% return.

Among other core REIT market sectors, industrial was up 16.54%; office was up 13.79% and apartments were up 13.30%.

Among other equity REITs, the infrastructure sector was up 20.80%; health care was up 19.81%; and timber REITs were up 18.31%.

The FTSE NAREIT Mortgage REITs Index gained 23.18%, led by the Commercial Financing sector with its 24.01% gain.

REITs also continued to reward income investors in July, NAREIT reports. At July 31 the dividend yield of the FTSE NAREIT All REITs Index was 4.16%, and the dividend yield of the FTSE NAREIT All Equity REITs Index was 3.23%. The dividend yield of the FTSE NAREIT Mortgage REITs Index was 12.50%, with Home Financing REITs yielding 13.06%. In comparison, the S&P 500’s dividend yield was 2.26%.


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