Wilson Magee, director of the Franklin Global Real Estate and Infrastructure Securities fund, agrees. He says the cash flow valuation of REITs appears to be attractive compared with equities. REITs are seen to post “stable” earnings growth, while equities are likely to face downward pressure. At the same time, the REITs are trading at relatively attractive valuations.
SINGAPORE (Mar 4): Following a skittish fourth quarter last year, major equity markets have enjoyed a rebound since the beginning of this year. Amid this volatility, US real estate investment trusts have stood out for their credible showing over the past 12 months. Besides “solid” fundamentals, the REITs were helped by the dovish stance of the US Federal Reserve, says Suleen Law, Southeast Asia senior vice-president of business development and financial institutions at Neuberger Berman. These factors enabled REITs to outperform US equities over the past year, notes Law. “Many economic indicators, including high consumer confidence, strong non-residential fixed investment and modest inflation, point to good tenant demand for real estate,” she adds.
