A new study by Avison Young has shown that data center REIT stocks are faring the best in a sector that has seen a downward trend overall since the COVID-19 outbreak. A total of 53 listings were tracked and revealed that the biggest decline (53.2 percent) was among retail focused REITs, with hospitality just behind (47 percent). Data centers, however, showed a 15.94 percent hike in prices since the coronavirus crisis began, outpacing even the industrial sector, which recorded a disappointing loss of 11.68 percent. “By looking at the performance of REITs concentrated in the commercial real estate industry we can see the far-reaching impact on the industry and notably the sectors driven by discretionary consumer spending and travel,” said Erik Foster, Avison Young principal and leader of the firm’s national industrial capital markets group.
“The silver lining is in the data center sector that is seeing a surge in attention given the growing importance of connectivity in keeping businesses operating.” The positive outcome among data centers is likely the result of the boom in consumer demand for online goods. “The continued growth in e-commerce and the expanding reliance on distribution and logistics space should put the industrial sector in a strong position to recover at a faster rate than other sectors,” said Foster.
