Globally, Real Estate Investment Trusts (REITs) continued their positive trend reversal in July: The global real estate equity market rose 5.1% (in EUR), significantly outperforming both global equities (0,4% FTSE-Index) and bonds (2,2% JP Morgan Global Bond-Index).
Germany made a positive contribution in an international comparison with 5.9% (in EUR); the Vonovia housing group was particularly convincing with a strong half-year report and a performance of seven percent in the seventh month, as the experts from Hazelview Investments, a global alternative investment manager with a focus on real estate, point out in their market commentary for July.
Italy and Norway lead the way in Europe
However, the contributions made by individual regions and sectors within the real estate industry in July were – once again – very different, according to Hazelview.
North America once again achieved the highest return with 6.3%, while Europe and Asia closed the month with 3.8% each. In Europe, Italy achieved the best performance with a return of 17.2%, followed by Norway with 12.1%. The losers on a country level were Finland (-3.4%) and Austria (-2.5%).
Outstanding country in the Asia-Pacific region (and one of the strongest markets worldwide) was Australia (6.0% in AUD). Japanese REITs, on the other hand, only achieved a return of 2.5% (in YEN).
Offices in USA and triple net sector made strongest contributions
The strongest contributing REITs sectors in July were listed office property operators in the USA (+16.6% in USD), real estate shares in shopping centers worldwide (+10.3%) and companies that provide infrastructure and real estate for telephone, mobile and internet operators (“triple net”) (+9% in USD). By contrast, the life science sector in Europe only contributed a marginally positive return of 0.3%.
REITs for single-family rental houses – a specialty in the USA – and hotels around the world closed the month at -2.2% and nearly unchanged (-0.6%) respectively.
“Increasingly clear at what attractive prices real estate stocks are being traded”
“The recent outperformance of REITs can also be understood against the backdrop of slightly falling key interest rates in some regions (EU, UK, CH) and the increasing expectation of an imminent reduction in the USA,” explains Claudia Reich Floyd. She is portfolio manager for global real estate equities and Head of the German office of Hazelview Investments. “As the economic situation normalizes, it is becoming increasingly clear at what attractive prices real estate stocks are trading.”
Hazelview Investments is an active investor, owner and manager of global real estate assets dedicated to creating value for people and places. Hazelview employs a global investment and asset management team of more than 90 people across its offices in Toronto, New York, Hong Kong and Hamburg and has CAD 11.7 billion (approximately EUR 8.0 billion as of June 30, 2024) of real estate assets under management. Further information can be found on the website www.hazelview.com.
