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Industrial, Data Center REITs Expected To Succeed In Q1 As Malls Struggle

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Barclays Capital analysts entered 2017 with a neutral outlook on REITs, and now that Q1 earnings reports are trickling in, their outlook has not changed.

Industrial and data center REITs are the exception. Analysts said the two will perform strongly, GlobeSt reports, as e-commerce supply chain build-out continues to create huge demand for industrial properties. National industrial vacancies fell in 75% of U.S. markets during Q1, and experts said construction levels are rising to meet the challenge.

Barclays said data center REIT earnings should remain robust as demand continues to grow, evidenced by Google’s recent Nevada land grab. The sector's stocks yielded an average 9.5% in returns in Q1. While analysts project the other REIT sectors will post neutral returns, they highlighted mall REITs as the one clear negative, where they expect continued pressure on sales.