Toronto, ON, Canada (4E) – Canadian portfolio managers are recommending a buy for U.S. real estate investment trusts (REITs) with its five-year consecutive gains than Canadian real estate with high risk.
Tom Dicker, a portfolio manager at 1832 Asset Management, Dynamic Funds, made the recommendation as he sees significant rent growth in a tighter U.S. property market cause by little construction happening in the last five years.
Scott Baker, a senior vice-president with Toronto-based MacNicol & Associates Asset Management, said prices of Canadian residences can’t continue to rise faster than the rate of inflation forever making the risk/reward ratio as not very attractive.
Dicker cites Prologis Inc. as top choice for a U.S. REIT as the world’s largest provider of industrial real estate reported a strong second quarter performance.
“Our results reflect high occupancy levels with strong growth in rental rates, above average development margins, and increased earnings from our Strategic Capital business,” said Hamid R. Moghadam, chairman and CEO of Prologis.
Prologis ended the quarter with 94.6 percent occupancy in the operating portfolio, up 90 basis points over the same period in 2013. The company leased 29 million square feet in its combined operating and development portfolios in the second quarter.
When purchasing a REIT, an investor is not only taking a real stake in the ownership of property via increases and decreases in value, but is also participating in the income generated by the property, according to Investopedia. Individuals can invest in REITs either by purchasing their shares directly on an open exchange or by investing in a mutual fund that specializes in public real estate.
There are many REIT companies to choose from but a more crucial challenge is managing investment in such funds. To do this, investors should have proper education on investing. One source of such education is InvestView, a website offering tools that simplify stock research.
Investor technology and education company InvestView Inc. (OTCQB: INVU) of Red Bank, New Jersey provides the platform plus financial educational courses that customers can subscribe to on the company’s website. Blogs, newsletters and other reference materials that describe investment strategies; and mentoring, coaching, and advisory services are also provided via subscription to InvestView.