Tariffs, Trump and new trends: The constant ups and downs on global markets since Donald Trump brought out the tariff stick have prompted investors to look for stable investments. REITs have been among the winners so far this year. Six experts from Hazelview Investments explain the six causes and trends responsible for this in a new whitepaper.
The ups and downs that the world markets have been experiencing since Donald Trump’s global tariffs – the declaration of his so-called “Liberation Day” on 2 April – have investors all over the world on the lookout for safe and stable investments. Real Estate Investment Trusts (REITs) have been among the winners so far this year.
Global REITs performed 5.6 per cent through the end of May, compared to 5.2 per cent for global equities, according to Bloomberg data.[1] Even after Trump’s announcement of a 90-day suspension of tariffs, US REITs (– 2.6 %) outperformed the US equity indices S&P 500 (– 5.3 %) and Nasdaq (– 7.5 %).[2]
“This valuation disconnect represents a compelling entry point for investors in global REITs, especially if trade tensions persist and a sector rotation takes place – out of more cyclical asset classes and into more defensive and trade-insulated sectors,” says Claudia Reich Floyd, portfolio manager for global real estate and head of Hazelview Investments’ German office. She is also one of six authors of a new whitepaper from the investment manager entitled “Why REITs can escape trade uncertainty.”
Long leases, stable cash flows, protection against inflation
In their analysis, Reich Floyd and her colleagues look at six reasons for the current good performance of REITs – an asset class that has mostly lost out to equities over the past five years, especially in the US.
Historical observations – from the bursting of the dotcom bubble in the early 2000s to the tariff dispute between the US and China from 2018 to 2020 during Trump’s first term in office – have shown that REITs have weathered the crisis years much better than many traditional forms of investment.
According to the authors, REITs owe this above all to their stable, inflation-linked cash flows. These are usually based on long-term rental agreements with commercial tenants – between one and ten years, but up to 15 years for more defensive property types.
REITs are also regarded as a natural hedge against inflation due to their investments in properties with inflation-linked rent control (CPI-linked rent increases).
High dividends and participation in new trends
US REITs have also outperformed US equities before, after and during recessions: they have delivered an above-average performance in all seven recessions in the USA since 1973 – with the exception of one pre-recession and one post-recession phase.
Attractive dividend payments are another reason for the solidity of the asset class. “REITs have consistently paid higher dividends than most other equity sectors because they are required by regulation to pay out the vast majority of their taxable income,” says Ms Reich Floyd.
Finally, REITs enable investments in special property and infrastructure sectors, allowing investors to benefit from technological and social trends. These include, for example, investments in mobile phone masts and data centres, but also in retirement homes and student accommodation.
“These and other sub-sectors of the property market remain largely unaffected by tariffs, making REITs particularly attractive to investors in the current environment,” conclude the Hazelview experts.
You can read the full whitepaper here.
About Hazelview Investments
Hazelview Investments is an investor, owner and manager of global property assets committed to creating value for people and places. We are an active investor and have a hands-on team that identifies investment opportunities around the world. We are committed to fostering the long-term growth of our people, residents and the investments we make for our clients. Our global investment and asset management team of more than 90 people is based in Toronto, New York, Hong Kong and Hamburg. We manage real estate assets of CAD 11.7 billion (approximately EUR 7.5 billion as of 31 March 2025). For more information, please visit the website: www.hazelview.com.
[1] Source: Bloomberg LP, FTSE EPRA Nareit Developed Total Return Index vs. MSCI World, 02.01. to 30.05.2025, on a USD basis
[2] Source: Bloomberg LP, US REITs, represented by regional index of the FTSE EPRA Nareit Developed Total Return Index, 02.01. to 30.04.2025, on a USD basis
