Investing in listed real estate

Strong long term performance

European listed real estate has delivered a solid 5.3% annualised return over 15 years, significantly outperforming government bonds and delivering returns well above inflation.

Attractive dividend yield

Listed real estate companies have provided investors with a stable and attractive income stream, delivering consistently higher dividend yields than bonds and ECB rates. The FTSE EPRA Nareit Developed Europe REITs Index average 5-year dividend yield is 4.64%, only slightly below the 3-year average dividend yield of 4.77%

Excellent liquidity

Listed real estate companies can be readily bought and sold unlike other forms of real estate ownership.

Governance & Transparency

Listed real estate companies operate under the same rules as other public companies for securities regulatory and financial reporting purposes.

EPRA recommends the use of EPRA Best Practices Recommendations (BPR) which provide further reporting guidance over and above public company reporting.

Diversification

• Equity diversification. Over the long term, listed real estate company returns have shown little correlation to the returns of the broader stock market.
• Geographic diversification. Listed real estate companies enable an efficient allocation of capital by geography, making use of the regional expertise of the property professionals at the listed real estate companies.
• Sector diversification. Listed real estate companies enable an efficient capital allocation by real estate sector, varying from the traditional sectors to new and relevant niche sectors.

However, it is worth noting that over the medium to long term listed real estate company returns perform in a similar way to other forms of real estate investment, but with the benefit of being highly liquid.

INSTITUTIONAL INVESTOR TESTIMONIAL

APG Asset Management manages assets for ABP, Europe’s largest pension fund. This case study illustrates how APG approaches listed and private real estate as one integrated asset class, with €17 billion invested in listed real estate representing 36% of its overall real estate portfolio. The slide shows how APG uses listed real estate to complement private investments by accessing alternative and specialist sectors, broadening sector and geographic diversification and adding liquidity and flexibility to support long term risk adjusted returns.