Manufactured homes were the REIT industry’s best performers in the first half of 2015 with a 3.75% return, followed by self-storage with a 3.72% total return, according to the National Association of Real Estate Investment Trusts.
Apartments were up 0.82% in the first half of the year with the office sector down 5.25%, retail down 7.24%, and industrial falling 11.33%. For mortgage REITs, the commercial financing sector was down 1.70%, and the home financing sector fell 6.12%.
The total return of the FTSE EPRA/NAREIT Global Real Estate Index declined 1.91% (in U.S. dollars) for the first half of 2015 and delivered a dividend yield of 3.60% at the end of June. Some of the index’s regional sectors, however, produced gains in the first half.
The FTSE EPRA/NAREIT Middle East/Africa Index pulled out the best performance of any region, with a total return of 5.75% for the year through June, while Asia/Pacific and Europe delivered gains of 3.27% and 2.32%, respectively. The total return of the FTSE EPRA/NAREIT Americas region fell 6.44% in the year’s first half.
The global index includes 471 companies from around the world with a combined equity market capitalization of $1.4 trillion, nearly three-quarters of which is from REITs. Thirty-one countries in addition to the United States have enacted REIT legislation to foster the development of their commercial real estate markets and facilitate investment in real estate securities.
U.S. REITs continued to offer strong dividend yields, NAREIT reported, with the dividend yield of the FTSE NAREIT All REITs Index at June 30 at 4.34%; the yield of the FTSE NAREIT All Equity REITs Index was 3.87%; and the FTSE NAREIT Mortgage REITs Index yielded 11.46%.
In comparison, the dividend yield of the S&P 500 was 2.10%, and the S&P Composite 1500 yielded 2.04%.
“Strong, consistent dividend income is an important component of REIT performance,” said NAREIT president and CEO Steven Wechsler in a statement. He noted that stock exchange-listed REITs paid out $42 billion in dividends in 2014, up 35% from $34 billion paid out in 2013.
— Check out Foreign REITs: Profits and Perils for Investors on ThinkAdvisor.