US REITS raise more than $109bn in 2019

A record $109.36bn (£84.3bn) was raised by the US REIT market in equity and debt from public capital markets last year. This was nearly double the $55.63bn raised in 2018, according to research from Nareit. The equity raised in 2019 included $220m from two IPOs, $31.99bn in secondary common shares, and $4.45bn in secondary preferred shares.  US REITs also raised a record $63.15 bn in unsecured debt, surpassing the previous record of $50.77bn raised in 2017. The REITs also continued to reduce their leverage, producing a debt ratio (total debt divided by total debt plus equity) of 27.5% for the FTSE Nareit All Equity REITs Index at the end of the third quarter, down from 32.30% at the same time last year, Nareit reported. In addition, double-digit returns were delivered by the US REIT market across nearly all sectors last year. The manufactured homes sector was the top performer for the equity REIT market’s performance, with a 49.09% total return for the year, Nareit said. Other top performing segments included industrial REITs with a 48.71% return, single family home REITs with 44.30%, data centre REITs with 44.21%, and timber REITs with 42%. Overall the FTSE Nareit All Equity REITs Index delivered a total return of 28.66% for 2019, with a 0.13% gain for the fourth quarter. “REITs in 2019 provided both the long-term growth and recurring income that characterizes real estate investment,” said Nareit President and chief executive Steven A. Wechsler.  “The REIT market’s performance underlines the value of REITs as a total return investment, delivering price appreciation in tandem with dividends critical for investors seeking income in today’s low interest rate environment.” To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette