REIT Performance Rose Throughout Q2: Report

The real estate investment trust (REIT) sector continued to show vibrancy throughout the second quarter, according to new data released by the sector’s trade association Nareit.

What Happened: During the second quarter, the FTSE Nareit All Equity REIT Index rose 12.03%, compared to the 8.55% gains recorded by the S&P 500. The FTSE Nareit Mortgage REITs Index increased by 6.69% during the same period.

Among the commercial property markets within the REIT sector, Nareit reported regional malls were up by 54.82% year-to-date, with shopping centers up 43.79%, self-storage up 36.38% and retail up 32.80%.

Among the mortgage REIT sectors, single-family homes were up 28.08%, residential was up 27.60% and manufactured homes were up by 16.52%.

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What Else Happened: Nareit added that REITs conducted 38 equity and debt offerings during the second quarter, raising $20.9 billion, including $8.27 billion in common shares, $2.35 billion in preferred shares and $10.2 billion in secondary debt offerings.

The FTSE Nareit All Equity REITs Index showed a second-quarter dividend yield of 2.85%, which was more than double the S&P 500’s 1.31% dividend yield.

“The recovery in REIT share prices is impressive in both its size and its breadth, with a 21.4% total return for the FTSE Nareit All Equity REITs Index in the first half of this year, and all but one property sector reporting double-digit returns,” Nareit Senior Economist Calvin Schnure.

“REITs boosted their capital raising activity significantly due to higher share prices and strong investor demand, while debt issuance slowed. Equity capital accounted for over half of total capital raised year-to-date, compared to 28% during the first half of 2020.”

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