Telecommunications REITs own digital real estate in the form of cell towers and fiber conduits and lease these properties to the world’s communication providers. Technology has changed the way we connect with the world around us, and telecommunications REITs own the structures enabling these connections.
Technology cycles and usage trends offer reasons to be optimistic for the future as the continuing propagation of 5G technology leads to further densification of cellular networks and consumer usage trends point to bandwidth needs that will only increase. High resolution video continues to become more ubiquitous and augmented/virtual reality applications, which require even more bandwidth, are still nascent. Looking further to the future, if the adoption of autonomous driving becomes widespread, it will require an increasingly reliable telecommunications infrastructure.
Reflecting the evolving nature of real estate and the speed with which technology is changing our lives, FTSE Russell and Nareit recently announced the rule change renaming the sector to telecommunications, taking effect with the 2023: Q4 index review. Through 2023: Q3, telecommunications REITs have generated $13.8 billion in funds from operations, on track to exceed the $16.2 billion of FFO earned in 2022.
- $16.2 billion: Generated by telecommunications REITs in funds from operations in 2022
- $13.8 billion: Generated by telecommunications REITs in FFO through 2023: Q3
- 4: Constituents in the FTSE NAREIT Telecommunications index
Sector Spotlight
FTSE NAREIT Telecommunications REITs
- Constituents: 4
- One-Year Return: -7.96%
- Three-Year Return: -3.62%
- Five-Year Return: 6.03%
- Dividend Yield: 3.55%
- Market Cap: $175.5 billion
- Dividends Paid (2023Q2): $1.6 billion
- NOI (2023Q2): $4.3 billion
Below is a list of Nareit member companies from the telecommunications sector.