Equity REITs April Balance: Retail Hammered

In April of 2015, the total return for the FTSE NAREIT US Real Estate All Equities Index experienced a decline of 4.9 percent, with an accompanying decrease in 5.1 percent for the share price return. On the brighter side, income return has increased by 0.1 percent, and the dividend yield is 3.6 percent.

The market punished all sectors across the board except for infrastructure, with the greatest penalty being a decline of 7.2 percent for retail. No one retail subsector by itself accounted for the drop, which hit shopping centers, regional malls and free-standing stores alike. The infrastructure, indeed, had increased by one percent.

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In Percent      
Sector Total Price Income Dividend
Retail (7.2) (7.4) 0.2 3.3
Health Care (6.7) (6.9) 0.1 4.8
Industrial/Office (6.3) (6.4) 0.1 3.3
Timber (4.5) (4.5) 3.9
Self Storage (4.4) (4.5) 0.1 3.0
Lodging/Resorts (4.2) (4.3) 0.2 3.7
Residential (3.8) (3.9) 0.1 3.2
Diversified (2.9) (2.9) 0.0 4.3
Infrastructure 1.0 0.7 0.3 2.7
All Equity REITs (4.9) (5.1) 0.1 3.6

The following companies in the retail sector were hammered in April:

Property Sector Company Ticker 05-01-15 Div. Yield Sector’s Median Div. Yield April Share Price Percent Change
Retail Saul Centers, Inc. BFS 3.4 4.0 (12.0)
Retail Brixmor Property Group, Inc. BRX 3.8 4.0 (11.7)
Retail Acadia Realty Trust AKR 3.1 4.0 (11.4)

In general, a declining stock price gives the dividend investor a greater opportunity to capture a higher yield. In this case, however, the resulting yields are below the median for that sector.

Another important index — MSCI US REIT Index (RMZ) fell by six percent, and year-to-date RMZ is down 0.8 percent.

Tomorrow, we will post the worst-performing stocks in each sector.

Written by Heli Brecailo

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.​