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Global REITs Outperformed on Economic Recovery Hopes, Australian REITs led in Asia-Pac

Global REITs Outperformed on Economic Recovery Hopes, Australian REITs led in Asia-Pac

By Patrick Ma, Director, Listed Products and Research, Admiral Investments

April 5, 2021 – Asia Pacific REITs rallied 1.9% in March and outperformed the region’s equity markets. Australian REITs led with a 4.4% increase. Japanese REITs were notable laggards, rising only 0.8% and underperforming the local stock market as a resurgence of coronavirus cases in the country cast a  shadow over the re-opening of its economy.

On a global level, REITs gained 3.7% and continued to outperform equities, which rose 3.4%. US REITs took the lead, gaining 4.7%.

Global markets climbed after investors shrugged off concerns about rising US bond yields and volatile commodity prices and focused on economic recovery in the developed world as vaccination rollouts saw progress, notably in the UK and the US. 

REITs Climbed Faster Than Equities in 1Q

For the first quarter of 2021, global REITs rose 7.4% year-on-year and outshone global equities’ 5.0% increase. US REITs led with a 9.3% increase in the first three months of the year. Japanese REITs led REITs’ performance for the Asia Pacific region, rising 6.7% versus Japan equities’ 1.7% increase over the same period.

We believe that the global economy will continue to rebound because of optimism over the re-opening of markets and the normalisation of trade and industrial production as vaccinations’ rollout gain pace.

The latest US$2 trillion infrastructure proposal from US president Joe Biden should further fuel US recovery hopes. Such developments should be positive for global REITs, especially those positioned for recovery, including retail and hospitality REITs.