In an interesting piece of analysis that caught our attention this week, Quay Global Investors, a boutique Australian fund, suggests that the relative underperformance of US real estate equities versus the S&P 500 might not be wholly justified by the underlying fundamentals.
The authors note that while listed US real estate this year have underperformed the S&P 500 by more than 20% in terms of share price, the average earnings per share downgrade for real estate stands at just -10.3% comparing quite favourably to a -23.8% EPS downgrade for the S&P 500 as a whole.
While real estate should not really be looked at a homogenous market, as subsectors within real estate have experienced very different outcomes from the COVID economic crisis, the authors ask if the real estate sector has in fact proved more resilient than their share performance would suggest.
Click here to read the full opinion piece.
