The objective is to identify REITS with potential for significant appreciation relative to risk.
Because REITS are generally regarded as hedges or defensive investments, they may be overlooked during bull markets.
Most recently, REITS in healthcare and industrial sectors have done well because they have both a real estate and a business component.
- Prologis, a REIT with worldwide logistics facility interests and a logistics business to go with it, is a good example.
- That isn't to say they're immune, as has certainly been seen with mortgage REITS and some leveraged residential REITS recently.
2 comments:
the prob with M,sian reit is that when the mart is down, the price goes down, though at a lesser amt. and on an up swing it seldom follows the mkt as it is then looked at as a fixed income instrument, this explains its price below assets backing for all M,sian reits, all if i am not mistaken. but its a wonderful yield product.
The anticipated returns from REITs are probably not worth the effort and risks involved to achieve them.
Given the current economic downturn, one may anticipate a mild decline in rental rates over the next one or two years. Tenants have also become more cautious.
If the economic downturn is prolonged, the value of a REIT can decrease despite knowledgeable management and solid history.
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