Investors who missed out on the last Reit boom are about to get another chance.

While the property market has been through a rough patch, things are starting to look up. Experts are saying this is the time to dive back into Reits, Investors Chronicle reports.

What’s Happening?

Reits are real estate investment trusts, and they’ve been struggling as interest rates have risen. This makes borrowing more expensive and has hurt valuations. But here’s the good news: Things are starting to turn around.

Retail – A Comeback in the Making

For a long time, physical stores have been losing out to online shopping. But things are changing.

• Retail rents have fallen for years, but in the last 12 months, they’ve started to go up again.
• Shopping centre rents are stabilising.
• Investment is increasing in prime shopping centres. British Land recently sold its half of Meadowhall Shopping Centre for £360 million.
• Land Securities just spent £120 million to buy a bigger stake in Bluewater.

Logistics – Booming Business

Demand for logistics space (warehouses, distribution centres, etc.) is through the roof, and it’s showing no signs of slowing down.

• Take-up of logistics space is up 44% in the first half of the year.
• Rental growth has slowed but remains positive.
• Reits like Sirius Real Estate are doing well.

Office Space – Not as Bad as it Seems

While office space is still in decline, there’s a strong demand for high-quality office buildings in prime locations.

• JLL (a real estate firm) says demand for high-quality London offices is “bonkers”.
• Vacancy rates are rising, but this is mostly in older, outdated buildings.
• Reits with a lot of exposure to London are trading at discounts, but that could soon change.

Why Now is the Time to Invest

• Interest rates are expected to start coming down soon.
• The government is focused on economic growth.
• Reits are currently trading at discounts to their net asset value (NAV).
• Experts are forecasting strong returns for Reits in the next few years.

Bottom Line

Reits have been through a tough time, but things are looking up. Investors should consider the potential for strong returns in the coming years. Now might be the perfect time to get into the market and buy into a sector that’s set to grow.