According to SNL Financial, all but two sectors are slated to post positive FFO growth in 2004. In 2003, anemic real estate fundamentals in most property types resulted in only a 0.29 percent growth in FFO per share. Enclosed malls and outlet centers posted the best results, while self storage, multifamily and hotel sectors posted declines in FFO per share growth in 2003. Despite poor fundamentals in 2003, estimates for 2004 look promising, according to SNL.
SNL notes that the only sectors that shouldn’t experience positive growth are manufactured homes and self storage. According to SNL, the median 2004 estimate for REITs in general is 2.29 percent. However, sector projections indicate an economic recovery with slow job growth. Hotels are slated to have the highest growth rate at 24 percent; enclosed malls are forecasted to post 9.2 percent, while shopping centers recover smartly, growing at 7.6 percent, according to SNL.
| Projected and Actual FFO Growth |
|
FFO Per Share Growth |
|
2003 |
2004(e) |
| Retail/Enclosed Mall |
12.8 |
9.2 |
| Retail/Outlet Center |
12.0 |
3.8 |
| Health Care |
4.5 |
8.5 |
| Retail/Shopping Center |
3.5 |
7.6 |
| Retail/Single Tenant |
2.3 |
2.2 |
| Industrial |
1.6 |
7.4 |
| Diversified/Specialty |
1.1 |
5.3 |
| Manufactured Home |
0.3 |
-2.4 |
| Office |
0.0 |
0.2 |
| Self Storage |
-1.9 |
-0.7 |
| Multifamily |
-9.9 |
2.7 |
| Hotel |
-21.5 |
24.2 |
|
|
|
| All REITs |
0.29 |
2.29 |
| Source: SNL. e=estimate. Data as of April 2. |
