Total returns for listed REITs in the first quarter of 2015 outperformed the S&P 500 by four to one, according to NAREIT. The FTSE NAREIT All REITs Index registered a 4.05% total return, compared with the S&P 500's 0.95%. Self-storage was the top-performing REIT sector.
REIT shares are once again beating the larger equity market's performance, after interest rate fears caused the sector to trail the market last year. REIT stocks posted returns of 8.6% for the first quarter, according to the DJ Equity All REIT Total Return Index, outpacing the S&P 500's total return of 1.8% over the same period. It's a return to normal, says Jerry Ehlinger, who manages a REIT fund for Heitman in Chicago.
U.S. REIT stocks surpassed the broader equity market in April, for the first month in 2013. According to the FTSE NAREIT U.S. REIT Index, U.S. equity REITs posted total returns of 5.8% for the month, compared with the S&P 500's total returns of 1.93%. According to NAREIT's Brad Case, the retail, infrastructure, self-storage and health care sectors did extremely well.
REITs are starting to look to overseas markets for growth again after having pulled back during the recession, says Bob O'Brien, partner and vice chairman with Deloitte & Touche. At the same time, a number of countries are implementing REIT regimes.
The Asia Pacific Real Estate Association reports that Asia Pacific REIT market value topped its previous record of $250 billion, reaching $265 billion in March. Asian REITs reached $162 billion from $150 billion. Recent large initial public offerings boosted these numbers.