Investing.com -- Barclays starts coverage of retail REITs, rating Kimco Realty (NYSE: KIM ) and Federal Realty Investment Trust (NYSE: FRT ) Overweight while it was Equal weight on Regency Centers (NASDAQ: REG ), Phillips Edison, Simon Property Group (NYSE: SPG ) and Tanger.

The brokerage said investors appear to be overpaying for the perceived defensiveness of certain grocery‑anchored portfolios, yet Kimco itself offers a cheaper way to own that theme. Barclays said New York‑based landlord is a large cap, high‑quality, diversified ‘proxy’ for grocery‑anchored shopping centers, trading at a modest discount to peers and set for about 5% funds‑from‑operations (FFO) growth next year.

Federal Realty, whose high‑end shopping districts span U.S. coastal markets, has lagged rivals since the pandemic but is shifting capital toward lower‑risk acquisitions and more modest redevelopments, the note said.

While Regency, Phillips Edison, Simon and Tanger all look fairly valued, the broker wrote.

Regency carries a three‑turn premium to the sector on forward FFO, Phillips Edison still trades above peers despite shrinking returns on recent acquisitions, and both Simon and Tanger face apparel‑heavy tenant rosters that could be squeezed further if tariffs rise.

Barclays’ sector outlook favours companies with strong balance sheets and improving free‑cash‑flow profiles, and is wary of REITs chasing FFO growth through acquisitions after a sharp compression in shopping‑center cap rates.

While consumer spending and tariff risks loom, Kimco and Federal Realty still screen as the best risk‑reward ideas in a retail landscape adjusting to slower economic growth.

Investors, the bank cautioned, should remember that “investors may be overpaying for the perceived defensiveness of certain grocery‑anchored portfolios.”