Real estate companies are gaining popularity after a year of decline.
This sector consistently has the lowest number of elite AAA-rated companies of the 11 global industries monitored by Citywire. But the world's best equity portfolio managers, whose investments are tracked by Citywire Elite Companies, are now enthusiastic about the prospects for the real estate industry, as revealed in our latest Top Rated Companies report. ing.
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Two real estate investment trusts included in January's 10 biggest gainers: Logistics Investors Prologis (US:PLD) and Self Storage Specialist public storage (USA:PSA). Both are now rated AAA, up from an A last month.
There are several reasons why real estate has been given wide leeway over the past few years. This is because high interest rates put pressure on valuations. Rising borrowing costs have made repayments and debt financing difficult. Economic conditions are hurting tenants. And the shift to online economic activity, from work to shopping, has been painful for many homeowners.
However, more smart money is now flowing into the sector amid hopes of a soft landing and lower interest rates in major economies.
That's reflected in Citywire Elite Companies' 83 real estate companies now boasting the highest AAA and AA ratings, an increase of two-thirds over the past 12 months.
Research shows that high-conviction bets by good fund managers are paramount to generating high returns. Citywire gives the highest AAA rating to the top 10% of these investors with the highest conviction, and the next 20% receive his AA rating.
