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Research - AUGUST 3, 2022

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REITs enable completion portfolios to prosper amid market uncertainty

by Kali Persall

Throughout the past 20 years, the REIT universe has expanded beyond the traditional property sectors to reflect the shifting structure of the 21st century economy, presenting a new wave of opportunities for investors.

According to a recent report released by Nareit, the major real estate food groups — retail, office, residential and industrial — comprised more than 80 percent of the market capitalization of equity REITs in the year 2000. Fast-forward to 2022 and sectors such as communications infrastructure, data centers and logistics facilities used in ecommerce now account for 36 percent of the market capitalization of all equity REITs (see chart below). Increasingly, investors are seeking to create “completion portfolios” that integrate new and traditional property sectors to become more diversified.

 

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