A look at how accurate predictions proved to be.

If my thought process at the beginning of the year was ‘Buy the Discounts’, the corollary was to ‘Sell the Premiums’. Doing the latter would have saved you a lot of money, doing the former wouldn’t have cost you much. I write just after the two largest ‘old REITS’, Landsec and British Land, have released their full-year figures. Both produced above consensus numbers and both management teams offered positive views going forward, subject to the normal caveats that we hear these days about the economy, cost inflation, bond yields and every conceivable bump in the road. Trading on 30% discounts or thereabouts, these are not expensive shares and my January view that they would be among the best performing REIT shares this year is being borne out.

As for selling expensive REIT shares, well, to call it a rout may be too strong, but it’s been pretty ugly to put it mildly. Segro produced absolute knockout numbers back in February, which went some way to justifying the fact that the shares traded at an all-time high of nearly 1450p at the start of the calendar year. They now trade in the low 1100s, having been lower. The announcement by Amazon that it may have over-expanded its physical estate (in the US) has prompted the sell-off and that sell-off has dragged down all REITs exposed to the logistics market. Given that said companies amounted to about 30% of the REIT sector by market capitalisation, then sector performance year-to-date has been weak, falling by 11% compared to the FT All Share Index down by just over 1%, the latter in a display of remarkable resilience.