URDANG, the real estate investment manager and part of BNY Mellon Asset Management, sees the Asia Pacific region leading the global recovery for real estate investment trusts (REITs) due the rapid growth of the economies in China, Hong Kong and Singapore. URDANG’s views were reported in a recent paper that is part of BNY Mellon Asset Management’s global outlook for 2011.
Strong-performing REITs are expected to benefit investors though a combination of appreciation and dividends, according to the report. In addition to Asia Pacific, the report notes the REIT markets in Canada, Australia and South America appear particularly attractive because they offer a mix of higher-yielding and higher-growth assets, as the economies in those regions benefit from commodities exports.
While URDANG expects overall returns for REITs to diverge in different markets, the report notes that in most markets real estate fundamentals are improving as apartment occupancies rise and office property rates increase in the largest urban centers.
“Overall, we see REITs as well capitalized and gaining favor as a vehicle for cross-border real estate ownership,” said Todd Briddell, president and chief investment officer for Urdang Capital Management. “REITs are attractive to investors seeking reasonable yields, and we expect that to continue until rates on savings deposits increase.”
Briddell noted that REITs have been successful in raising capital in 2010 and are well positioned to make property acquisitions, which will further fuel growth, providing them with an advantage over other types of real estate investments.
With regard to the U.S. market, the URDANG report notes that challenges to the economy are likely to shape investor sentiment. URDANG also expects slower growth and little rent appreciation in continental Europe, the U.K. and Japan.
Notes to Editors:
Founded in 1987 with an exclusive focus on institutional investment grade real estate, URDANG offers a variety of strategies and products, managing approximately $1.9 billion in public real estate securities through Urdang Securities Management, Inc. and approximately $1.6 billion in debt and private equity real estate investments through Urdang Capital Management, Inc. for institutional investors and high net worth individuals throughout global markets and across public and private capital sectors. URDANG’s research-driven process combines top down economic analysis and market/country selection with bottom up underwriting of properties, companies and management teams to seek high, risk-adjusted returns. It is one of the investment boutiques of BNY Mellon Asset Management.
BNY Mellon Asset Management is the umbrella organization for BNY Mellon’s affiliated investment management firms and global distribution companies.
BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $24.4 trillion in assets under custody and administration and $1.14 trillion in assets under management, services $12.0 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available at www.bnymellon.com.
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