Merryn Talks Money REITs Explained: How Real Estate Investment Trusts Work and What Moves Their Prices
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Feb 18, 2026 Jack Sidders, Bloomberg real estate lead who specializes in commercial property and REIT analysis. He explains how REITs give investors property exposure. He breaks down sector winners like warehouses, data centres and student housing. He discusses why UK REITs trade at discounts, the role of interest rates and how consolidation and AI-driven demand could reshape the market.
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Specialism Versus Pivoting
- REITs usually specialise by sector but many have pivoted after structural shocks like the retail collapse.
- Managers can reallocate into sectors they deem attractive, creating a tension with shareholders who wanted pure-play exposure.
Why UK REITs Trade At Discounts
- UK REITs have traded at persistent discounts (around 20% recently) driven by shocks across retail, offices and rising interest rates.
- Discounts vary widely by sector: warehouses have narrower discounts while offices and some residential remain unloved.
Scale Drives Investor Interest
- Smaller REITs face higher running costs and limited investor interest compared with huge US peers like Prologis.
- Scale matters: larger REITs attract more analysts, reduce cost ratios and improve liquidity for investors.