Amid inflation dips and interest rate hike pauses, it seems wise to consider fortifying your portfolio with robust Real Estate Investment Trusts (REITs): SmartCentres Real Estate Investment Trust (CWYUF – Get Rating), Simon Property Group, Inc. (SPG – Get Rating), and Saul Centers, Inc. (BFS – Get Rating), which are rated B (Buy) in our proprietary POWR Ratings system. Let’s understand this in more detail.
Last month, inflation edged lower due to reduced gasoline prices and a general easing of price pressures across the economy. According to the U.S. Bureau of Labor Statistics, the consumer price index in November rose by 3.1% from a year earlier, indicating a slight decrease from October’s 3.2%.
On top of it, the Federal Reserve paused an interest rate hike this month, further indicating at least three rate cuts in 2024.
Looking forward, the REIT market is projected to expand by $333.01 billion from 2022 to 2027, with a CAGR of 2.8%. Furthermore, investors’ interest in REITs is evident from the SPDR Dow Jones REIT ETF’s (RWR) 10.7% returns over the past month.
Moreover, as the holiday season kicked off, consumer spending showed an uptick, underscoring consumer resilience. Retail sales rose 0.3% in November from October, while it rose 0.6%, excluding car and gas sales. This bodes well for the retail REIT sector.
In light of these trends, let’s look at the fundamentals of the three REITs – Retail stocks.
Stock #3: SmartCentres Real Estate Investment Trust (CWYUF – Get Rating)
One of the most fully integrated REITs in Canada, CWYUF has 191 strategically located mixed-use properties across the country that total $12.0 billion in assets. It has a 98.5% occupancy across 3,500 acres of owned Canadian property and holds 35 million square feet of income-generating retail and top-tier office space.
On December 18…
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