What are industrial REITs?
Real Estate Investment Trusts (REITs) own income-producing commercial real estate, providing investors with a way to invest in the real estate sector without owning individual properties outright. REIT investors may realize returns through a combination of dividends and capital appreciation. A REIT investment may be considered a vehicle for diversification, rounding-out a portfolio of equities, fixed income and cash with an asset class characterized by non-correlated opportunity and risk.
Industrial REITs are one of six major types of REITs. The other five major REIT types include retail, residential, healthcare, office and mortgage—with the latter generally investing in portfolios of mortgages rather than real estate itself. Industrial REITs invest in real estate that is used for storage, distribution, manufacturing, production, and research and development. The unique legal structure under which all REITs, including Industrial REITs, operate generally requires them to pay out at least 90 percent of their taxable income as dividends to shareholders. This attribute, plus the presence of an underlying real asset, makes Industrial REITs compelling for investors who are seeking an opportunity for both income and appreciation.
In addition to other motivations, REITs generally appeal to investors for two principal reasons. First, demand for industrial real estate remains robust and resilient. Second, the unique legal structure of REITs requires Industrial REITs to pay out at least 90 percent of their taxable income to shareholders as dividends.
Industrial REITs - an investment in global distribution
Around the world, demand for logistics facilities, the underlying real assets for Industrial REITs, remains healthy due to their critical role in the global economy. Industrial property is essential to the movement of goods across global geographies to end consumers. Strategically-located, high quality buildings with easy access to transit routes ensure efficient supply chains for the world’s manufacturers, distributors and e-commerce companies. As a result, industrial REITs that own high-quality, well-located industrial properties are positioned to attract desirable tenants who consistently meet their monthly rental obligations thus offering investors compelling returns.
Industrial REITs can be publicly or privately held. Investors buy and sell shares in public Industrial REITs over one of the world’s exchanges with a high degree of liquidity and transparency, just as they would with stocks or exchange traded funds.
This article does not constitute an offer to sell or the solicitation of an offer to buy any securities.