Real estate funds actively increased their investments in telecommunications REITs during the first quarter of 2024, resulting in an overweighting of the sector and making it the second largest holding for these funds, according to a report from Nareit on Monday. Telecommunications now accounts for 14% of real estate fund allocations, up nearly three percentage points from last year and trailing only residential properties at 17.3%.
Meanwhile, both retail and industrial sectors saw decreases in weightings during Q1, dropping to third and fourth place respectively. Industrial’s share decreased by 3.1 percentage points compared to last year’s numbers at just 12.7%, while retail experienced a smaller decline of only 0.7 percentage points.
In terms of returns, active managers’ decision to increase their focus on specialty investments by almost one-and-a-half percentage points in Q4 matched with strong performance within that sector as they outperformed the index by over twelve-and-a-half percent during Q1of this year.In contrast,Nareit noted that reducing exposure to industrial properties also resultedin underperformance within that sector as funds reduced their holdingsby0 .7percentagepointsduringQ42023andthenseeingsaidsectorunderperformtheindexbyone-point-twopercentagepointsduringthenextquarter.
The article “Real Estate Funds Shift Allocations To Telecom REITs” was originally published on Connect Commercial Real Estate (CCRE).
