12/1/2017 | By Sarah Borchersen-Keto
REITs moved higher in November as activity in the retail real estate sector boosted overall market performance, according to analysts.
The total returns of the FTSE Nareit All REITs Index gained 2.6 percent in November, while the S&P 500 posted a total return of 3.1 percent. For the first 11 months of 2017, total returns of the FTSE Nareit All REITs Index gained 9.4 percent, while the S&P 500 returned 20.5 percent.
Total returns of the FTSE Nareit All Equity REITs Index gained 2.7 percent in November and 9.0 percent through the first 11 months of the year. The total returns of the FTSE Nareit Mortgage REIT Index added 0.6 percent in November, but rose 17.0 percent for the year to Nov. 30.
The yield on the 10-year Treasury note was flat in November and also for the year through Nov. 30.
“There wasn’t a lot of rate movement or out-of-consensus economic activity in November. It was more specific to sectors that had a nice rebound and more steady-as-she goes from some of the other core sectors,” said Chris Lucas, senior managing director at Capital One.
Lucas noted that retail REIT performance in November benefitted from an increase in shareholder activism in mall REITs and a general rebound for shopping centers. That activity boosted the overall REIT market, he said.
Returns on retail REITs gained 7.3 percent in November. Mall REITs saw returns climb 9.3 percent, while returns for shopping center REITs moved 6.8 percent higher.
Ki Bin Kim, a REIT analyst at SunTrust Robinson Humphrey, highlighted the $15 billion takeover bid for GGP Inc. (NYSE: GGP) by Brookfield Property Partners as a “clear driver of stock performance” during the month.
Among other property segments, total returns for industrial REITs gained 3.1 percent in November and 24 percent year-to-date.
Data center REITs saw total returns fall 0.3 percent for the month, although returns for the year to Nov. 30 have gained 31 percent.
Infrastructure REIT total returns moved 2.9 percent higher in November, bringing year-to-date returns to a gain of 31 percent.