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7 Top Retail REITs to Buy Now

CEO Khai Intela
Investing in real estate investment trusts (REITs) can be a smart way to hedge against stock market volatility. If you're interested in the retail sector, retail REITs can be particularly attractive, offering opportunities to invest...

Investing in real estate investment trusts (REITs) can be a smart way to hedge against stock market volatility. If you're interested in the retail sector, retail REITs can be particularly attractive, offering opportunities to invest in shopping centers, supermarkets, and other retail spaces. While the retail sector is known to be recession-prone, there are certain types of properties that tend to retain value better than others. Properties with recession-resistant anchors like Walmart and mass-market grocery stores are more likely to weather economic downturns successfully.

REITs, in general, have the potential to perform well in a low-interest-rate environment. However, it's crucial to choose the right ones to invest in, as asset quality can vary. To help you make an informed decision, here are seven of the best retail REITs to consider:

Realty Income Corp. (Ticker: O)

Shopping Mall Image Source: Fidelity Interactive

Realty Income is one of the largest retail REITs and an attractive choice for investors. Its tenant roster includes prominent names like Walgreens Boots Alliance, Dollar General Corp., and 7-Eleven. The company's portfolio consists of over 6,400 properties across the U.S., Puerto Rico, and the United Kingdom. Realty Income's focus on businesses that are less susceptible to the effects of e-commerce growth, such as Walgreens with its expansion of in-store health clinics, makes it a promising investment. The current dividend yield is 3.74%, and the company has shown consistent revenue and earnings growth over the past five years.

National Retail Properties (Ticker: NNN)

National Retail Properties specializes in retail investments for properties that utilize triple-net lease arrangements, where tenants cover ownership costs. The company's portfolio comprises over 3,100 properties across 48 states. With top tenants like 7-Eleven, Camping World, and AMC Entertainment Holdings, National Retail Properties has a diverse range of investments in convenience stores, restaurants, and auto service retailers. The current dividend yield stands at 3.9%, and the company has delivered strong performance, averaging a 10-year annual return of 15.1%.

Slate Retail REIT (Ticker: SRRTF)

Slate Retail is an excellent choice for investors looking for exposure to grocery-anchored retail space. The company focuses on acquiring U.S. commercial properties, particularly in major cities like Atlanta and Charlotte. Once properties are acquired, Slate Retail's management team works to increase rents, improve lease terms, and drive occupancy. With a portfolio of 76 properties totaling approximately 9.9 million square feet and a 93% occupancy rate, the company offers stability and potential for growth. Slate Retail's current dividend yield is an impressive 9.06%, placing it among the top dividend-payers in the sector.

SITE Centers Corp. (Ticker: SITC)

SITE Centers invests in nearly 70 retail shopping centers across the United States. Its diverse tenant mix includes retailers, restaurants, and grocery stores. With properties in major cities such as New York, San Antonio, and San Francisco, SITE Centers provides stability in uncertain times. Regardless of economic conditions, people will always need to buy food, making supermarket anchors a reliable source of consistent dividend income. SITE Centers boasts a dividend yield of 6.75% and offers a safe haven for investors seeking stability in their portfolios.

Simon Property Group (Ticker: SPG)

Simon Property Group Image Source: Fidelity Interactive

Simon Property Group is the largest shopping mall REIT and one of the largest retail REITs overall. The company's size and management strategy give it a competitive edge in the market. Simon has the capital to maintain prime locations and invest in new value-creating projects, such as adding hotels and entertainment areas to its malls. With properties in the U.S. and several international markets, including the United Kingdom, France, Japan, and Malaysia, Simon Property Group offers diversification and stability. A low exposure to underperforming locations, a strong balance sheet, and a dividend yield of 6.86% make it an appealing investment option.

KIMCO Realty Corp. (Ticker: KIM)

KIMCO Realty Corp. operates a vast portfolio of open-air shopping centers across North America. The company's properties span from New York to California, with a focus on major metropolitan markets. KIMCO's investment strategy emphasizes properties that cater to more affluent consumers, with a wide range of tenants from boutique hair salons to supermarkets. The company has maintained near-full occupancy rates and continues to seek expansion opportunities in key cities such as Tampa, Austin, and Portland. With a healthy dividend yield of 6.31%, KIMCO Realty Corp. offers both stability and growth potential.

These seven retail REITs present compelling investment opportunities in a sector that can be unpredictable. By carefully selecting REITs with attractive tenant rosters, solid balance sheets, and consistent revenue growth, investors can position themselves to benefit from the long-term potential of these retail properties. Remember, it's always essential to conduct thorough research and consult with a financial advisor before making any investment decisions.

Disclaimer: The mentioned REITs are examples for informational purposes only and are not recommendations to buy or sell any securities. Investors should conduct thorough research and consult with a financial advisor before making any investment decisions.


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