The shine has come off real estate investment trusts as bond yields recently have started to tick upwards.
But analysts at National Bank Financial have taken a closer look at the sector's sensitivity to interest rates and think that the concerns may be overblown. Interest rates are still at historically low levels and it's unlikely that the market was ever pricing in the record low yields that were reached earlier this year.
And while rising interest rates will eventually increase the cost of capital for REITs, the impact won't be felt by all REITs equally in the near term, they believe.
National Bank details its views, plus has some suggestions on which REITs should continue to prosper, in this research report, which the bank has given us permission to reprint in its entirety.