AREITs beat index
Despite volatility during the past few weeks, this year's performance of the sector was the fourth straight positive year for AREITs, which now average a 15.4 per cent return.
Brokers have forecast average distribution growth for the AREITs for the 2013 financial year to be about 4 per cent in the reporting season, starting with Australand on July 24.
American REITs also posted gains overall for the first six months of 2013, according to the National Association of Real Estate Investment Trusts (NAREIT).
The FTSE NAREIT All REITs Index was up 5.41 per cent on a total return basis for the first six months of the year and the FTSE NAREIT All Equity REITs Index was up 5.79 per cent.
The US REITs finished the half behind the broader equity market. The S&P 500 was up 13.82 per cent, proving the two markets do not always move together.
NAREIT president and chief executive Steven A. Wechsler said in a report that the REITs provided potential portfolio diversification due to the relatively moderate correlation of their returns with those of the broader market.
US REITs have maintained strong balance sheets, NAREIT reports. The debt ratio for equity REITs is 33 per cent, near its historic low.
Frequently Asked Questions about this Article…
AREITs finished the financial year up 24.2% on a total return basis, outpacing the S&P/ASX 200's 22.8% total return.
Yes — the sector posted its fourth straight positive year and now averages a 15.4% return, according to the report.
Despite some volatility in the past few weeks, AREITs still delivered a positive full-year performance.
Brokers forecast average distribution growth of about 4% for AREITs in the 2013 reporting season, which begins with Australand on July 24.
US REITs posted gains in the first six months of 2013: the FTSE NAREIT All REITs Index was up 5.41% and the FTSE NAREIT All Equity REITs Index was up 5.79% on a total return basis.
No — US REITs lagged the broader equity market. The S&P 500 was up 13.82% in the same period, showing REITs and broader equities don't always move together.
Yes. NAREIT's president noted REITs can provide portfolio diversification because their returns have a relatively moderate correlation with the broader market.
US equity REITs have maintained strong balance sheets: the reported debt ratio for equity REITs is about 33%, which is near its historic low.
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