Global REITs were up slightly in a volatile first quarter. In January, as soft landing green shoots began to emerge, REIT's rallied about 10%. However, in February and March REITs, sold off on concerns of a banking crisis as a result of the Silicon Valley Bank failure and weakness in other regional banks. This set up a great opportunity for astute active REIT managers to add alpha -- whereas office concerns weighed on office REITs, other REIT sectors, like healthcare, rallied.
We continue to position our portfolio in companies that can demonstrate strong top line growth, with limited wage inflation risk and trade at reasonable valuations. There remains an opportunity for active real estate managers to add alpha as technology and mobility impact the way people live, work and play.
- The U.S. REIT market posted a 2.3% gain for the first quarter, lagging the broader, S&P 500’s 7.5% rise. A positive return for the quarter is noteworthy given the dramatic volatility in rates and stress in the U.S. banking sector. After its fall of 26% in 2022, we continued to view the REIT market as overly discounting a likely slowdown in the U.S. economy.
- The European public real estate index took another step back in March for the second month in a row, returning –9.3% (USD total return) in March. Europe finished far behind North America, with a total return of –2.9% in March and further behind Asia Pacific, with a total return of –1.1%.
- The Asian real estate equity market ended the first quarter with a –1.65% return, which is not too disappointing, considering the banking sector turmoil in the United States and Europe that gripped the global markets in March.
Public REIT Securities
Diversified portfolios of publicly traded real estate companies designed to meet a wide range of investor objectives
Learn more