Filed Under:Life Insurance, Life Planning Strategies

SNL: REITs enjoy double-digit price appreciation

Real estate investment trusts appreciated 13.3 percent in value for the one-year period ending on March 28, 2013, according to a new report.

SNL Real Estate, a unit of SNL Financial LC, Charlottesville, Va., released this finding in a new report, “SNL U.S. NAV Monitor—April 2013. The report compares REITs' net asset values (NAVs) to stock prices.

The median discount to NAV for the U.S. REIT industry made a strong shift into the premium territory throughout the first quarter of 2013, ending March with a median premium to NAV of 6.3%, the report states. U.S. REITs were trading at a 2.2% median discount to NAV at the end of 2012, and a 0.1% discount as of March 30, 2012.

Health care REITs grew to a  high premium to NAV, with the companies in the sector trading at a median of 47.2% at the end of the first quarter, up 19.6 percentage points from the Dec. 31 premium of 27.6%.

Multifamily REITs lagged behind all other sectors, with a median discount to NAV of 9.2%, the largest discount among all U.S. REIT sectors. The SNL US REIT Multifamily index provided investors with a negative 1.9% total return for the one-year period ending March 28, well behind the 17.5% return by the broader REIT market.

Multifamily REITs provided investors with a  strong 69.1% total return in the two-year period covering 2010 and 2011 before slowing greatly in 2012 and 2013 YTD. The sector posted 7.5% total return from the beginning of 2012 through April 2, 2013.

By sector, U.S. REIT median premium/(discount) to NAV (percentage) were as follows at the close of March 28:

--Health care: 47.15

--Self-storage: 19.79

--Mfd home: 11.89

--Specialty: 10.21

--Retail (other): 9.6

--Shopping centers: 9.60

--Industrial: 9.47

--Diversified: 6.25

--All REITs: 6.25

--Office: 4.05

--Hotel: 2.25

--Regional malls -3.74

--Multi-family -9.19

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