Perspectives: Listed REITs - Fall edition

September 16, 2024

Kelly Rush, CFA

Chief Executive Officer, Public Real Assets & Chief Investment Officer, Real Estate Securities

Todd Kellenberger, CFA

Client Portfolio Manager, Real Estate Securities

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AT-A-GLANCE

Public REITs have benefited from a great rotation within equity markets since the end of June, with U.S. REITs returning 13.2% vs. S&P 500 3.7%.
Clear evidence of a growth slowdown and moderating inflation has increased the market’s conviction Fed rate cuts are imminent.
REITs in sectors such as senior housing, single-family rental, cold warehouse storage, and wireless towers are a compelling opportunity with visible, defensive cash flows that offer attractive growth under a variety of economic outcomes.
Despite recent outperformance, REITs remain historically cheap relative to equities.
Public REIT valuations remain attractive versus private real estate funds.

REITs should do well under our expected macro-outcomes of a soft landing or mild recession

There are signs that steep central bank rate hikes are starting to slow the economy. A cooling in labor markets is unmistakable with slower hiring, but layoffs remain tame. This suggests labor markets will weaken but unemployment might not increase significantly.

Clear evidence of a growth slowdown and moderating inflation has increased the market’s conviction the Fed will keep cutting rates. Investor rotation into longer duration, resilient cash flows would be a tailwind for REITs relative to other equities.

Property sectors with lower economic sensitivity and resilient, structurally-driven demand should outperform amidst the prospect of an economic slowdown. For more of our thoughts on the listed REITs preferences, read our full perspective.

Real estate

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Delegation of Investment Management to Affiliates

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This website may contain videos where the comments were valid on the date the video was recorded. Markets move continuously and you should only rely on current information for any investment decisions. The information and materials contained on this website, and the terms, conditions, and descriptions that appear, are subject to change. All content on this website is presented only as of the date published or indicated, and may be superseded by subsequent market events or for other reasons. In addition, you are responsible for setting the cache settings on your browser to ensure you are receiving the most recent data.

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This website contains general information only on investment matters and nothing in this website is intended to constitute or form part of any offer or inducement to issue or sell, or any solicitation of any offer to subscribe for or purchase, any securities or investment products in the UAE (including the Dubai International Financial Centre) and accordingly should not be construed as such. Information in this website is not directed at you if we are prohibited by any law of any jurisdiction from making the information on this site available to you and is not intended for any use that would be contrary to local law or regulation. Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be available in all jurisdictions. Accordingly persons are required to inform themselves of and observe any such restrictions.

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This website contains general information only on investment matters and should not be considered as a comprehensive statement on any matter and should not be relied upon as such. The information it contains does not take account of any investor's investment objectives, particular needs or financial situation. Past performance is not a reliable indicator of future performance and should not be relied upon as a significant basis for an investment decision. You should consider whether an investment fits your investment objectives, particular needs and financial situation before making any investment decision.

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