Hard-hit equity investors turn to global REITs-S&P
LONDON Oct 21 (Reuters) - Shellshocked equity investors are turning to tax-efficient real estate investment trusts (REITs) to bolster income returns generated by their bruised stocks portfolios, a report showed on Tuesday.
In its latest Global Property & REIT report, Standard&Poor's said its Global REIT index outperformed broader equity stocks significantly in the third quarter, falling by 4.4 percent compared with a 16.6 percent slump in its Global Broad Market Index.
"The shifts in the financial markets, combined with fears for the broader economy, have caused turmoil in the stock markets...however in the midst of all the turmoil, REITs and REIT-like companies -- which are typically leveraged at around 40 percent -- have done surprisingly well," S&P said.
U.S. REITs in particular benefited from a rebound in investor sentiment towards liquid, transparent stocks with secure dividend prospects, the report showed.
U.S. property stocks generated annualized returns of more than 5 percent in the third quarter, while other U.S. stocks measured by the S&P Broad Market Index delivered comparative returns of minus 8.4 percent.
S&P said a temporary ban on short-selling had protected many U.S. REITs from the recent spell of unprecedented stock market volatility.
Four of the five top performers in the S&P Global REIT Index this quarter were U.S companies. Retail specialist Getty Realty Corp (GTY.N) generated the highest REIT share price return of 53.9 percent during the period.
European REITs also provided a relatively safe haven for investors seeking refuge from freefalling stock markets, the report said. The third-quarter price decline in European non-property shares was more than double the 10.1 percent slide in European REITs.
Asian Pacific property stocks performed roughly in line with broader non-property stocks in the third quarter, dropping by 19.5 percent compared with 20.8 percent as progress on the launch of REIT regimes in China, India, Pakistan and Indonesia slowed.
(Reporting by Sinead Cruise; Editing by Jon Loades-Carter)
(See www.reutersrealestate.com for the global service for real estate professionals from Reuters)
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