Oct 29 (Reuters) - Multifamily real estate investment

trust UDR lifted the lower end of its annual forecast

for adjusted funds from operations on Wednesday, driven by

strong rental growth.

UDR, which operates over 60,000 apartment homes in the U.S.,

is betting on the constrained supply of new homes in its markets

to drive growth in rental rates.

The Highlands Ranch, Colorado-based REIT reported

third-quarter AFFO of 65 cents per share, compared with the

analysts' average estimate of 62 cents per share, according to

data compiled by LSEG.

It expects full-year AFFO between $2.53 and $2.55 per share,

compared to its prior outlook of $2.49 to $2.55.

Total revenue for the quarter ended September 30 came in at

$431.9 million. Analysts, on average, were expecting revenue of

$429.3 million for the third quarter.