The Standard & Poor's 500 index outpaced equity REIT returns last year, although over the past month REITs have regained significant ground. In 2016, the FTSE NAREIT All Equity REITs Index delivered an 8.63% total return, compared with the S&P 500's 11.96%, but in December the All Equity REITs Index was up 4.46% compared to the S&P 500's gain of 1.98%.
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.
Measuring the success of a sustainability program can be difficult, says Brad Molotsky, executive vice president and general counsel with Brandywine Realty Trust. The REIT has developed a number of innovative approaches to this issue, he says. "We’ve looked at a variety of tools in order to help us."
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.