Four-fifths of real estate industry leaders believe that real estate investment trusts (REITs) will outperform the S&P 500 composite index over the next 12 months, according to a poll conducted at the 10th annual North American Real Estate Conference in Chicago in September.
Specifically, almost half (45%) of the 97 real estate industry leaders attending the conference, which was hosted by Toronto-based Bank of Montreal’s capital-markets arm, stated REITs would beat the S&P 500 by more than 3% while 35% of those polled said the asset class could outperform by as much as 10%.
This is a large jump over the input received at the 2014 conference, at which 13% of attendees believed REITs would outperform the S&P 500.
Respondents for the 2015 poll felt that that better performance will come with increased interest toward the sector from mainstream investors. Approximately two-thirds (65%) of respondents said the move to have REITs classified within their own sector on the major market indices in the autumn of 2016 will help draw more interest as REITs are currently grouped under “financials.”
“Corporate and investor attendees alike expect the flow of funds from mainstream investors to increase, albeit marginally, as a result of real estate obtaining its own [global industry classification standard],” says Paul Adornato, analyst with BMO Capital Markets, in a statement.
The poll also found that 52% of respondents expect residential real estate to be the best performing subsector among REITs in 2015.