Reits actually do better when rates rise, but not in Canada
Over there, they become riskier bets due to lower cashflow growth and higher leverage, says property fund
Toronto
REAL estate investment trusts aren't to be avoided as interest rates rise - except in Canada, where lower cash-flow growth and higher leverage make them riskier bets, according to the head of securities at a C$6.5 billion (S$7 billion) real estate fund.
"If you look at the empirical evidence, Reits actually outperform in a rising-rate environment," Corrado Russo, global head of securities at Timbercreek Asset Management Inc, said in a phone interview. "They tend to do better both on a relative and on an absolute basis."
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