All REIT Sectors Deliver Strong Returns in April
According to the National Association of Real Estate Investment Trusts (NAREIT), for the first four months of the year, the FTSE NAREIT All Equity REITs Index was up 13.00% and the FTSE NAREIT All REITs Index was up 12.02% compared to the S&P 500’s 9.06% gain. On a 12-month basis ended April 30, REITs strongly outperformed the S&P 500, with the FTSE NAREIT All Equity REITs Index up 22.88% and the FTSE NAREIT All REITs Index up 22.37% compared to the S&P 500’s 17.22%.
The Office sector topped other major REIT market sectors in April with a 6.87% return. Apartments and Retail followed closely with 6.59% and 6.55% returns, respectively. The Retail sector was led by Regional Malls with a 7.15% return. The Industrial sector delivered a 2.33% return for the month.
Offices also topped other major sectors for the first four months of 2011 with a 15.01% return, followed by Apartments with a 13.91% gain; Industrial with 13.77% and Retail with 11.36%. Regional malls again topped the Retail sector with a gain of 13.90%. For the 12 months ended April 30, Apartments were up 31.52%; Industrial was up 28.5%; Retail was up 25.22% (led by Regional Malls, up 29.43%); and Office was up 19.37%.
REITs also continued to deliver strong yields for income investors. The top performing sector was Home Financing Mortgage REITs with a yield of 14.18% at April 30. The FTSE NAREIT All REITs Index delivered a 4.09% yield at April 30, compared with a 2.89% yield for the Barclays U.S. Agg. Corporate Bond Index and a 1.90% yield for the S&P 500.
Industry data as of April 30, 2011 includes:
- Total equity market capitalization = $455 billion
- Equity REIT market capitalization = $412 billion
- REITs own approximately $500 billion of commercial real estate assets, or 10% to 15% of total institutionally owned commercial real estate
- 158 REITs are in the FTSE NAREIT All REIT Index
- 140 REITs are traded on the New York Stock Exchange
- NYSE listed REITs equity market capitalization = $445 billion