REITs End Year Nearly 40% Higher

January 5, 2004 ( - Riding stout returns in the fourth quarter and December of 2003, the NAREIT Composite REIT Index ended the year with a strong 38.47% return.

The impressive numbers turned in were the biggest gain for the collection of Real Estate Investment Trusts (REIT) since 1976.   Also, the Composite was able to best the broader Dow Jones Industrial Average and S&P 500 indices for the fourth consecutive year, according to data supplied by the National Association of Real Estate Investment Trusts (NAREIT). 

By comparison, the Dow Jones Industrial Average and the S&P 500 were up 25.32% and 28.68%, respectively, for the year.   As impressive as the NAREIT Composite was though, it was unable to top the 50.01% return notched by the technology heavy NASDAQ Composite.  

Another REIT gauge showed similar results.   The SNL Equity REIT Index returned 37.5% in 2003. That stellar performance represents the highest total return number in over 12 years for the Index; far outpacing last year’s 4% total return and besting the previous annual return record – 1996’s 35.9% (See  REITs Return 37.5% in ’03 ).

Strongest among the NAREIT Composite’s components was the Mortgage REIT Index that was up 57.39% in 2003.   This was followed by a 56.19% return for the Hybrid REIT Index, a 37.13% gain posted in the Equity REIT Index and the 36.30% improvement registered in the Real Estate 50 Index.

Through the year, the NAREIT Composite was showing strong returns, which culminated with the year-end numbers after posting a fourth quarter return of 10.43% and a December 2003 return of 3.43%.   Over the past five years the Composite is up 14.65% and it is up 11.96% looking back 10 years.