Monday, February 12, 2007

who is buying reits when Institutional investors are net sellers?

now watch this chart since november and ask yourself who is buying when indeed the institutional investors are net seller .......... ? pure frenzy/speculation etc.

betrachtet diesen chart und fragt euch wer um himmels willen hat gekauft wenn in demselben zeitraum die institutionellen netto verkauft haben? der nackte wahnsinn, reine spekulation


Feb. 12 (Bloomberg) -- Deutsche Bank Private Wealth Management and MFS Investment Management are dumping shares of U.S. real-estate investment trusts just as Blackstone Group LP pays the most ever for a property owner. http://immobilienblasen.blogspot.com/2007/01/equity-office-38-billion-takeover-sign.html

Shares of U.S. REITs are the most expensive in more than two decades compared with Treasury notes after the five-year property boom. Real estate stocks have led the Standard & Poor's 500 Index higher this year on speculation takeovers will increase after Blackstone agreed to buy Sam Zell's Equity Office Properties Trust for $39 billion in the biggest-ever leveraged buyout.


``Sam Zell is probably the shrewdest operator in this field that there is,'' said ..... ``If he's selling, I don't think I want to be a buyer.'' ....


Institutional investors with $11.9 trillion in assets have been net sellers of REITs since November, ...... Shareholders sold as dividend yields on the trusts tumbled below those of government debt.

The average yield of U.S. REITs tracked by the National Association of Real Estate Investment Trusts, or NAREIT, fell to 3.78 percent at the end of January. That was 1.03 percentage point less than the 10-year Treasury note, the biggest discount since 1985, according to data compiled by Bloomberg. ....

Returns in the almost $500 billion U.S. REIT market quadrupled since 2000 amid the global property boom. ......



`Rich-Looking'
``The market has got ahead of itself for REITs,'' ..... ``It's rich-looking to me. "

U.S. REITs tracked by the Leuthold Group last month traded at an average of 18.8 times adjusted funds from operations. That's the highest since at least 1997 and almost 50 percent more than the average for the past decade.....
i remember back in the old days there was a net asset value to judge how cheap real estate was. than they moved to the pe, dividend yield and now they measure it with the ffo, FFO is calculated by adding depreciation and amortization expenses to earnings)! what´s next.......maybe they hire the accountants from "camp nelson".......

ich kann mich noch erinnern wie immobilien(aktien) zuallererst am inneren wert gemessen worden sind. danach kam das kgv, dann die dividendenrendite und nun nach dem ffo. schon günstig wenn man abschreibungen und instandhaltung einfach dazu anstelle von abziehen kann, oder? könnt euch die definition ja mal durchlesen. was kommt als nächstes....evtl. werden die buchhalter aus camp nelsen eingestellt......

"Funds From Operations. A financial measure used by REITs to define their operating performance. FFO is calculated by adding depreciation and amortization expenses to earnings. This gives an idea of the REIT's cash performance, which is a better measure of the REIT's performance than earnings, which include (often large) non-cash items."

`Shocked'
Benjamin Pace, who oversees $17 billion as chief investment officer at Deutsche Bank Private Wealth Management in New York, said he's been ``shocked'' by the run-up in REIT shares.

The last time REIT dividend yields fell as far below Treasury yields was during the seven years that started in November 1978.

The NAREIT index underperformed the S&P 500 during that span by 33 percentage points.

REITs in Asia and Europe also have reached records as asset prices in Japan rebounded and countries from the U.K. to Germany and Pakistan follow the U.S. in introducing property trusts.

The Bloomberg Asia REIT Index climbed 34 percent in the past 12 months and five of the 10 biggest gains were from Japan.

Tokyo Prices
Commercial land prices in Tokyo
increased last year for the first time in 15 years, according to figures from Japan's government, attracting investors to Japan's five-year-old REIT market.

In the U.K., the FTSE All-Share Real Estate Index jumped 45 percent in 2006, outperforming a 13 percent gain in the broader market, before property trusts were approved on Jan. 1.


The gains pushed dividend yields in Asia and Europe even lower than in the U.S. Asian REITs yielded 3.26 percent last week, while those in Western Europe were 3.4 percent,

``One is hard pressed today to say that the REITs are a good value,''
Some investors who say REITs are overvalued expect that acquisitions will still inflate prices. The value of real estate trust takeovers announced last year more than doubled from 2005 to about $137 billion,
Run Over
``You can run against the trend and get run over by the herd,''

So far this year, $27.6 billion in deals have been announced, the figures showed.

New York-based Blackstone ..... will pay 33.8 times Equity Office's funds from operations....!!!!!!

London Rents
Dividend yields on REITs may rebound as five-year leases on office property signed at discounts in the wake of the Sept. 11 terrorist attacks get renewed at higher prices.

Midtown Manhattan rents climbed 19 percent to $62.07 a square foot from a year earlier, according to CB Richard Ellis Inc., the world's largest real estate consultant, in its semi- annual report in November.

In London's West End, the world's most expensive location, rents increased 24 percent to $212.03 a square foot. Office space in central Tokyo rose 12 percent to $145.68 a square foot, while Hong Kong jumped 35 percent to $116.25.

``It's not a cheap way to get involved in the real estate market,'' .....

``All the private-equity money to me is somewhat of a last gasp'' for the REIT rally, he said. ``If they want them that badly and if you're involved in that market, you're supposed to say, `By all means, have mine.'''

disclosure: short reit index / iyr

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