The news on Monday Nov. 9 that a vaccine showed surprisingly good results in preventing COVID-19 infections rallied markets across the globe. REITs outperformed the broader markets by a wide margin, especially those property sectors that had been most impacted by the shutdowns and social distancing measures.
The FTSE Nareit All Equity REITs index posted a total return of 3.4% on Nov. 9. This is a larger one-day gain than any weekly return since Oct. 2, and compares to a 1.0% total return on the Russell 1000.
The property sectors that have been most impacted by social distancing recorded some of the largest one-day gains in memory. Lodging/resorts registered a 31.2% return on the day, and retail REITs posted a nearly 20% gain. Other sectors in the double-digits for the day include diversified, health care, and office.
The news took some of the wind out of the sails of the sectors that have led the market during the pandemic. This includes data centers, industrial, and infrastructure, which support the digital economy. Even with the correction on Monday, however, year-to-date returns range from 9.4% and 11.0% for industrial and infrastructure, respectively, to 21.8% for data centers.