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Real Estate Stocks: Timbercreek Predicts Double-Digit Profits

In a study, a real estate company writes what returns it expects for the new year. As soon as they arrived, they could well be seen.

This year, total returns on global listed Real Estate Investment Trusts (Reits) are expected to be between 8 and 10 percent, up from 11.4 percent last year (all in US dollar terms). That's the forecast in the Global Real Estate Securities 2018 Market Outlook, the annual study by Timbercreek, a global real estate company. The profits will consist of a cash dividend of 4.6 percent and a revenue growth of 4 to 5 percent. This should come from higher rents, new projects and increasing acquisitions in the real estate business. In addition, global equities currently trade about 10 percent below their net asset value (NAV), Timbercreek said.

According to the study, the German office market will be among the big winners in 2018 with declining vacancy rates and rising rents, especially in the seven largest German cities.

"In an environment where global stock markets are reaching new highs and fixed income securities are facing rising interest rates, we consider real estate offers a valuable source of alternative returns," said Claudia Reich Floyd, Portfolio Manager and Head of Timbercreek's Hamburg office.

The study (English) can be downloaded here .

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