For institutional investors in Norway

Global Perspectives Podcast: How much is stagflation a concern for REITs?

Portfolio managers Guy Barnard and Greg Kuhl join Adam Hetts, Global Head of Portfolio Construction and Strategy to discuss REITs’ performance to-date and the impact of stagflation concerns, rising rates, and higher energy and other input costs on the sector.

Key Takeaways

  • Year-to-date, global REITs have delivered returns in the middle of global equities and global government bonds, providing a more resilient, defensive income stream, with typically less exposure to short-term earnings from the global economy.
  • Stagflation and rising energy costs remain a risk. Landlords with pricing power are increasingly differentiating themselves and should see more resilient demand and growth.
  • Should bond yields and interest rates move significantly higher, this could impact property capital values. However, most REITs have been very proactive in recent years extending and fixing their debt book, which should reduce their exposure to short-term rate rises.
  • There is an increasing focus on the sustainability of buildings, particularly in the office market where there is a huge polarisation in tenant demand and asset value between more sustainable, environmentally-efficient, lower energy costs buildings and those that lack these characteristics.
Adam Hetts, CFA

Adam Hetts, CFA

Global Head of Portfolio Construction and Strategy


Greg Kuhl, CFA

Greg Kuhl, CFA

Portfolio Manager


Guy Barnard, CFA

Guy Barnard, CFA

Co-Head of Global Property Equities | Portfolio Manager


20 Apr 2022

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

The information in this article does not qualify as an investment recommendation.

 

Marketing Communication.

 

Glossary

 

 

 

Adam Hetts, CFA

Adam Hetts, CFA

Global Head of Portfolio Construction and Strategy


Greg Kuhl, CFA

Greg Kuhl, CFA

Portfolio Manager


Guy Barnard, CFA

Guy Barnard, CFA

Co-Head of Global Property Equities | Portfolio Manager


20 Apr 2022