REIT Yields Beat Bonds After "Overdone" Drop

Laura Cochrane Sept. 3 (Bloomberg) Property securities are worth buying for their dividends alone, which offer superior yields to government bonds after the “overdone” drop in share prices prompted by the U.S. housing slump, ING Real Estate said.

Real estate investment trusts are on average being priced at a 17 percent discount to their net asset value, making most of their dividend yields higher than long-term government bonds, Steve Burton, U.S.-based portfolio manager for ING Clarion Real Estate Securities, said today at a conference in Sydney.

“There is no doubt that growth is decelerating in global property markets and that signs of a slowdown are evident among listed property companies, however recent earnings results suggest that overall property fundamentals remain healthy,” Burton said.

Dividends of real estate investment trusts in the U.S. are yielding 5 percent, compared with 4 percent for 10-year Treasuries, ING Clarion said today in an e-mailed statement.

Trusts in Japan yield 3 percentage points more than 10-year government bonds and Australian trusts yield 3.1 percentage points more than 10-year Commonwealth bonds, ING said.

Click here for a list of Apartment REITs, including current yields
Click here for a list of Hotel REITs, including current yields
Click here for a list of Industrial REITs, including current yields
Click here for a list of Mortgage REITs, including current yields
Click here for a list of Office REITs, including current yields
Click here for a list of Retail REITs, including current yields
Click here for a list of Storage REITs, including current yields
Click here for a list of REITs paying dividends in stock

Information on how REITs work can be found in the post REIT Definition.