As the U.S. economy continued its sluggish recovery last year and markets continued to improve, one of the brightest spots was the sector that triggered the financial collapse—real estate. Real estate investment trusts have displayed a strong performance in the last couple of years, and professional investors expect that to continue in 2013. The reasons are simple: gradually improving demand combined with little growth in supply.

The FTSE EPRA/NAREIT Equity Index gained 19.7% last year, outpacing the 13% gains notched by the S&P 500. Worldwide, REITs did even better, with the FTSE EPRA/NAREIT Global Total Return Index climbing 25%. With REITs worldwide increasing dividends last year to 3.5% to 4%, they were a no-brainer for income-hungry investors. Last year U.S.-based REITs grew dividends at a double-digit pace.

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