AEW’s Szymanski Sees More Momentum for REITs
REITs have outperformed the broader market so far in 2021, and one large real estate investment advisor explains why she sees even more upside potential.
April 26, 2021 | Beth Mattson-Teig | Wealth Management
After facing tough market challenges last year, REITs appear to be on course for a bull run as 2021 continues to unfold.
Total returns on the FTSE Nareit All Equity REIT Index surged from the -5.12 percent recorded in 2020 to 15.04 percent year-to-date as of April 22. So, what’s ahead for REIT performance and strategy in the coming months? “The easy money where people rotated into the value trade where there were heavily discounted stocks has been made, and now it’s about earnings growth recovery,” says Gina Szymanski, director and portfolio manager at AEW Capital Management, one of the world’s largest real estate investment advisors.
According to its most recent REIT Strategy Quarterly Webcast, AEW is predicting average cash flow yield of 4.7 percent and dividend yield of 3.6 percent this year. Earnings growth, excluding hotels, is projected to be about 3 percent in 2021 and then grow to 9 percent in 2022. The strongest growth is anticipated in net lease, niche residential, self-storage and hotel REITs, while healthcare, apartment, office and retail are forecast to have weaker growth in 2021 and then rebound in 2022.
