The FTSE Nareit All Equity REITs Index rose 4.7% in October, outperforming broader equity markets on both a monthly and year-to-date basis. The broader stock market declined modestly over the month, with the Russell 1000 falling 0.7% and the Dow Jones U.S. Total Stock Market declining 0.8%. The All Equity REITs Index has returned 13.0% year-to-date, while the Dow Jones U.S. Total Stock Market is up 11.7% and the Russell 1000 has gained 11.5%. Geopolitical uncertainty, yield volatility from government debt, and the potential for tightening monetary policy continue to be on investors’ minds.
The 10-year Treasury yield declined in October, closing at 4.91%, down from 5.27% at the end of September. The dividend yield on the FTSE Nareit All Equity REITs Index ended the month at 3.77% with the FTSE Nareit Mortgage REITs Index yielding 16.59%, compared to 1.04% for the S&P 500.
Property Sector Performance
As shown above, lodging/resorts continues to lead on a year-to-date basis with a total return of 55.2%, followed by specialty at 31.9%, and data centers at 30.5%.
The table above reflects the broad rally from REITs in October. Telecommunications led with a gain of 19.3%, followed by self-storage at 14.9%, and lodging/resorts at 12.8%.
The FTSE Nareit Mortgage REITs Index fell 4.5% in October, with home financing REITs declining 3.2% and commercial financing REITs dropping 9.0%. On a year-to-date basis, the FTSE Nareit Mortgage REITs Index has lost 16.3%, with home financing declining 11.3%, and commercial financing dropping 30.9%.