REIT bonds: opportunities after the storm

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REITs segments such as logistics and data centres on the rise

Bonds issued by real estate operators have had an eventful journey over the last two decades. The bursting of the real estate bubble was followed by the Global Financial Crisis in 2008, and the euro crisis in 2011. In the low-interest environment that followed, real estate companies issued increasingly high bond volumes. After a sell-off of real estate bonds during the COVID-19 crisis of 2020 and the subsequent recovery, risk premiums recently rose to their highest level since the GFC. Markets fear the consequences of rising financing costs, high inflation and a cooling of the economy. We believe that these fears are overblown and that favourably priced real estate investment trusts (REITs) – such as those operating in the logistics and data centre segments – are increasingly attractive.

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Authors

Gerald Deutsch

Gerald Deutsch joined Berenberg in 2021. He started his career in the Berenberg Graduate Program with assignments in discretionary equity and fixed income portfolio management, fixed income research, as well as in institutional fund sales both in Germany and Switzerland. He exited the program early in 2022 and became a fixed income portfolio manager with a focus on corporate credit. He holds a Master of Finance from Frankfurt School of Finance & Management and a Bachelor of Psychology from the University of Kent.

Portfolio Manager Fixed Income Euro
Christian Bettinger

Christian Bettinger, CFA, has been with the company since June 2009. As fund manager of the mutual funds Berenberg Euro Bonds and Berenberg Credit Opportunities, he is responsible for the selection of corporate bonds in the Multi Asset area. After apprenticeship as a banker and studying business administration at the Catholic University of Eichstaett-Ingolstadt, he first went through the trainee program at Berenberg. In February 2010, the business graduate was taken over early as a junior fund manager with a focus on derivatives and fixed income. Bettinger is a CFA-Charterholder, Certified Financial Engineer (CFE) and admitted Eurex trader.

Head of Fixed Income Euro Flexible