REITs face market volatility and declining income

Real estate investment trusts (REITs) are facing significant headwinds due to shifting economic indicators and internal portfolio challenges. In the U.S., REITs have experienced a seven-week losing streak, their longest on record, as volatility in interest rates persists despite softer jobs data and cooler inflation figures.

While M&A activity remains active—highlighted by Brixmor’s $2.3 billion Slate Grocery deal—the sector is grappling with rate volatility. Simultaneously, Regional REIT (LSE: RGL) reports a deterioration in income and a shrinking portfolio value. Despite a dividend yield above 10% and a 51% discount to net asset value, the company saw net rental income fall from £46m to £40.3m in FY2025. Management has targeted a reduced dividend of 8p per share for 2026, citing expected tenant breaks that may further depress income.