The U.S. real estate investment trust (REIT) market continued to outperform the broader equity market in the first nine months of 2011, in spite of losing ground to the S&P 500 in the third quarter, according to new data.
The total return of the FTSE NAREIT All REITs Index-the broadest U.S. REIT index-was down 6.1%, and the FTSE NAREIT All Equity REITs Index was down 6.1% in the first nine months of the year ended Sept. 30, according to the National Association of Real Estate Investment Trusts (Nareit)
By comparison, the S&P 500 was down 8.7% in the same period.
Substantial REIT dividends (REITs must pay out at least 90% of their taxable income to shareholders as dividends) accounted for much of the total return advantage over the S&P 500 in the first three quarters of 2011.
The FTSE NAREIT All REITs Index's cash dividend yield at Sept. 30 was 5.2% compared to 2.1% for the S&P 500.
In the third quarter, the total return of the FTSE NAREIT All REITs Index was down 14.6% and the FTSE NAREIT All Equity REITs Index was down 15.1%, while the S&P 500 was down 13.9%.
On a 12?month basis ended Sept. 30, the FTSE NAREIT All REITs Index delivered a total return of 1.1% and the FTSE NAREIT All Equity REITs delivered 0.93% compared with 1.1% for the S&P 500.
Top performing sectors of the REIT market in the first nine months of the year were manufactured homes, up 12.6%; self?storage, up 10.4%; and
apartments, up 1.8%.
The same sectors led the REIT market on a 12?month trailing basis ended Sept. 30, with manufactured homes up 18.4%; self?storage up 16.7% and apartments up 12.7.
While REIT capital raising declined to $7.9 billion in the third quarter from $13.7 billion in the second quarter, the $43.4 billion raised by REITs in public equity and
debt offerings in the first nine months of 2011 kept the industry on track to match or surpass the $47.5 billion raised in all of 2010, according to Nareit.