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The Markets March 1, 2011
REITs Strongly Outperform the Broader Market
The U.S. REIT market significantly outperformed the S&P 500 through February, according to the National Association of Real Estate Investment Trusts (NAREIT).
Reported by PLANADVISER staff
The FTSE NAREIT All Equity REITs Index was up 8.90% and the FTSE NAREIT All REITs Index gained 8.29% in the first two months of 2011 compared to 5.88% for the S&P 500. The FTSE NAREIT All Equity REITs Index was up 4.58% and the FTSE NAREIT All REITs Index was up 4.49% in February compared to the S&P 500’s 3.43% gain.
On a 12-month basis ended February 28, 2011, REITs strongly outperformed the S&P 500, with the FTSE NAREIT All Equity REITs Index up 39.54% and the FTSE NAREIT All REITs Index up 37.96% compared to the S&P 500’s 22.58%.
All sectors of the REIT market showed solid gains in the first two months of the year, with some sectors significantly outperforming the overall REIT indexes. According to the report, top performing sectors were Timber, up 21.89% in the first two months of the year (up 4.10% in February); Commercial Financing, up 19.46% in the first two months (up 16.53% in February); and Industrial, up 12.60% in the first two months (up 8.23% in February).
Gains in other major sectors included Office REITs, which were up 8.35% in the first two months (up 2.28% in February). Retail REITs were up 7.38% in the first two months (6.51% in February) led by Regional Malls, up 8.94% in the first two months (8% in February). Apartments were up 6.5% in the first two months (3.91% in February).
On a 12-month basis ended February 28, top performing sectors were Commercial Financing, up 60.62%; Apartments, up 52.85%; and Lodging/Resorts, up 47.53%.
REITs also continued to deliver strong yields for income investors. The FTSE NAREIT All REITs Index delivered a 4.12% yield at February 28 compared with 3.41% for 10-year U.S. Treasuries.