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12/21/2020

Vaccine releases boost retail REIT stocks

Al Urbanski
Real Estate Editor & Manager
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The Pfizer vaccine's most effective, early shot in the arm may have been to retail REITs, whose stock prices have risen 40% since their approval.

The release of two vaccines against COVID-19 turned out to be the best Christmas present for retail real estate investment trusts. 

The regional malls and shopping center REIT indexes each rose more than 40% following announcements of the release of the Moderna and Pfizer-BioNTech vaccines, according to the Wall Street Journal. That made REITs two of the best-performing sectors. The S&P 500 rose just 4.6% during the same period.

Simon Property Group shares have risen by more than 40% to $87.32 over roughly the past month. Tapping the equity market last month, Simon raised $1.56 billion at $72.50 a share from investors.

With vaccines already being dispensed to health care workers and public servants, fund managers believe REITs have already hit their bottoms and will continue to progress—especially if holiday sales are strong.

“We want to own retail landlords that have the capital and management skills to repurpose their properties,” Cohen & Steers portfolio specialist Evan Serton told WSJ.

Tests have shown both vaccines to be 95% effective. The United States approved the Pfizer-BioNTech vaccine on Dec. 11 and set out with plans to quickly distribute hundreds of millions of doses.