Real estate investment trusts (REITs) are a smart way to hedge against stock market volatility. If you're interested in investing in shopping centers, supermarkets, and other retail spaces, retail REITs might catch your eye. While the retail sector can be recession-prone, there are properties that tend to retain value better than high-end ones, thanks to recession-resistant anchors like Walmart and mass-market grocery stores. In this article, we'll explore the best retail REITs to buy now, offering stability and potential growth in an uncertain market.
Realty Income Corp. (Ticker: O)
Realty Income is one of the largest REITs in the market and an attractive choice for investors. With a diverse tenant roster that includes Walgreens Boots Alliance, Dollar General Corp., and 7-Eleven, Realty Income boasts a portfolio of over 6,400 properties in the U.S., Puerto Rico, and the United Kingdom. The company's investment strategy focuses on businesses that are insulated against the effects of e-commerce growth, with tenants continuously adding relevant services to stay connected to their communities. Over the past five years, Realty Income has consistently shown revenue and earnings growth, making it a promising investment option. The current dividend yield is 3.74%.
Shopping Mall
National Retail Properties (Ticker: NNN)
Specializing in retail investments with triple-net lease arrangements, National Retail Properties is a reliable option for investors. Its portfolio consists of over 3,100 properties across 48 states, including top tenants such as 7-Eleven, Camping World, and AMC Entertainment Holdings. Focused mainly on convenience stores, restaurants, and auto service retailers, National Retail Properties has seen steady revenue and earnings growth in recent years. The current dividend yield stands at 3.9%, and the REIT has maintained an impressive 10-year annual return of 15.1%.
National Retail Properties
Slate Retail REIT (Ticker: SRRTF)
Slate Retail focuses on investing in U.S. commercial properties, specifically grocery-anchored retail spaces. What sets Slate Retail apart is its unique approach to growth. After acquiring properties, the management team finds ways to increase rents, improve lease terms, and drive occupancy. With a portfolio of 76 properties totaling approximately 9.9 million square feet, Slate Retail has a 93% occupancy rate. Its current dividend yield of 9.06% makes it one of the best dividend-payers in the sector, standing alongside some of the largest REITs in the market.
Slate Retail REIT
SITE Centers Corp. (Ticker: SITC)
SITE Centers Corp. is an attractive investment option with nearly 70 retail shopping centers across the United States. Its tenant range includes retailers, restaurants, and grocery stores, making it a diversified REIT. With properties in major cities like New York, San Antonio, and San Francisco, SITE Centers offers stability in an uncertain market. The focus on supermarket anchors ensures a consistent and stable dividend income, regardless of how the broader stock market is moving. The current dividend yield is 6.75%.
SITE Centers Corp.
Simon Property Group (Ticker: SPG)
As the largest shopping mall REIT and one of the largest retail REITs overall, Simon Property Group is a significant player in the market. With a global presence, including properties in the United States, United Kingdom, France, Japan, and Malaysia, Simon Property Group has the capital to maintain prime locations and invest in value-creating projects. By continuously adding hotels and new entertainment areas to their malls, Simon Property Group stays competitive and shows potential for growth. The REIT boasts a strong balance sheet, low exposure to underperforming locations, and a dividend yield of 6.86%, making it an appealing investment option.
Simon Property Group
Conclusion
Investing in retail REITs can provide stability and potential growth in an uncertain market. With properties anchored by recession-resistant businesses and a focus on versatile tenants, these REITs offer a steady income stream and the potential for long-term value retention. Consider including these top retail REITs in your investment portfolio to hedge against market volatility and make the most of your investment opportunities.
Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Before making any investment decisions, please consult with a professional financial advisor.
