NAREIT Media:Media Brief
In January, the FTSE NAREIT All REITs Index, the broadest index of the U.S. REIT market, delivered a 0.24 percent total return, the FTSE NAREIT All Equity REITs Index delivered a 0.17 percent total return and the FTSE NAREIT Mortgage REITs Index returned 1.60 percent compared to the S&P 500’s 1.90 percent.
Ten Equity REIT market segments – more than half of the property segments in the FTSE NAREIT All Equity REITs Index – had double-digit total returns in 2016.
The total return of the U.S. Equity REIT market fell short of the S&P 500’s gain in 2016, while Mortgage REITs nearly doubled the total return of the broader equity market.
Investors focused on income continued to find much to like in the REIT market in November. The FTSE NAREIT All REITs Index had a dividend yield of 4.33 percent on November 30, the FTSE NAREIT All Equity REITs Index had a dividend yield of 3.98 percent and the FTSE NAREIT Mortgage REITs Index had a dividend yield of 10.11 percent. In comparison, the dividend yield of the S&P 500 on November 30 was 2.12 percent.
The Single Family Home property segment led the U.S. REIT market in the first 11 months of 2016 with a 28.34 percent total return. Single Family Home REITs are benefitting from an environment in which many potential home buyers cannot meet today’s tighter lending standards.
REIT returns underperformed the broader equity market in November as investors concerned with rising interest rates shifted assets out of REITs and other income-oriented investments. The shift occurred in spite of the fact that analyses by NAREIT and various investment organizations have shown that REITs typically perform well in periods of rising interest rates.
Industrial was the top-performing Equity REIT market segment, up 26.71 percent in the first ten months of 2016. The Industrial sector benefitted from the continuing growth of e-commerce. Many online retailers and shippers rely on Industrial REITs’ logistics facilities for the distribution of their products.
The FTSE NAREIT All REITs Index, the broadest index of the U.S. REIT industry containing Equity and Mortgage REITs, fell 4.89 percent in October on a total return basis, while the FTSE NAREIT All Equity REITs Index fell 5.11 percent and the FTSE NAREIT Mortgage REITs Index declined 0.13 percent. In comparison, the S&P 500 fell 1.82 percent in October.