Offering diversified exposure to quality real estate assets, the RE-REITs are worth considering by an investor. There are currently 34 RE-REIT traded at ASX, with a total market capitalization of approximately $ 120 billion. This represents almost 6% of the total value of the stock market.
A REITs are classified according to the types of properties that they operate in their portfolios. Goodman Group, the largest publicly traded A-REIT mutual fund, owns, develops and manages industrial properties in Australia and around the world. Holders of shares in the Goodman Group are therefore players in global industrial markets.
Industrial property is currently favored as companies focus on upgrading logistics and distribution facilities to compete in the virtual world. It means a lot of new and big warehouses. Goodman overcame this wave of positive sentiment and its share price has risen more than 50% in the last 12 months.
Scentre Group, which owns, manages and develops Westfield shopping centers in Australia and New Zealand. Scentre Group is classified as a retail REIT. Retailers in Australia and New Zealand – and even around the world – have been tough lately, and investors in retail REITs have been exposed to these headwinds.
However, the types of properties owned by A-REITS retailers vary considerably. The Scentre group focuses on large shopping centers, while others, such as Australasia shopping centers, operate smaller, convenience-oriented centers, and the Aventus Group operates homemaker centers. Retailers trading in these different types of centers operate in different ways, and a savvy investor will consider them.
The other specialized REITs operate exclusively in the fashionable office sector, as well as in the warehousing, housing, health, childcare, consumer goods and services sectors. service stations and farmland. Investors who have a favorable view of these sectors and properties owned by a specific trust may obtain direct exposure by purchasing shares in one or more of these RE-Funds.
The last category of REIT-A is diversified trusts, the largest of which is GPT (abbreviation of General Property Trust). GPT owns and manages 64 properties in Australia, including 13 shopping centers, 21 office buildings and 30 industrial facilities.
Stockland, which includes residential development in its operations, and the Charter Hall Group, are other examples of large, diversified REITs A.
The ability to choose and choose sector or geographic specialization or diversification is important for investors in A-REIT. Equally important is the generally transparent nature of REITs' operations, with the majority of revenues generated by significant rental income.
Of course, with 10-year bond yields below 2% and dividends paid by most RE-REITs between 4 and 7%, the performance bonus that investors in RE REITs Liquidity, term deposits and bonds are very attractive.
Finally, A REITs, like all stocks, also offer good liquidity and low transaction costs. This contrasts with the direct ownership of property, especially residential property, where returns, prices and tax changes all pose problems.
Justin Ganly
is General Manager of Deep End Services Real Estate Consulting Firm
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Stafford Hts
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Artarmon
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Windale
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