Investing in listed real estate securities offers several benefits. Historically, the sector has provided competitive long-term performance, an attractive and stable dividend yield and portfolio diversification. In addition, listed real estate can act as a hedge against inflation and is more liquid than direct real estate investments.
The sector has grown tremendously over the past decade fuelled by the growth of the securitisation of real estate and proliferation of real estate investment trust (REIT) regimes globally. Investors can gain exposure to a variety of listed real estate return streams using indexed strategies, including broad listed real estate securities, REITs only and focused exposure to rental or non-rental securities. Evaluating environmental, social and governance (ESG) characteristics has become a growing trend and now investors can access sustainability-focused listed real estate indices.