As valuations freefall income growth is king for REITs

Already on large discounts

Real estate investment trusts (REITs) have been among the biggest fallers on the UK stock market as turmoil continues to grip UK financial markets.

The sharp interest rate rises expected to follow the collapse in the value of the pound do not bode well for the real estate sector in the UK.  Many of the REITs were already trading on large discounts to net asset value (NAV), in part due to the expected impact of rising interest rates on real estate values. Discounts have widened further in the past week as the pound weakened after chancellor Kwasi Kwarteng's Mini Budget - raising the prospect of a faster and higher rise in interest rates by the Bank of England, and a deeper recession that could potentially affect demand for space by t...