A-REIT valuation model

clowboy said:

In short, not really, the best you can do is the likes of CWP who develop residential property (that is they sell residential land)

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Tooth Faerie said:

Sorry if this is the wrong thread and if it's a silly question.

I was looking through all the A-REITs and they're all invested in commercial property (or retirement residential). I'm interested in residential property, are there any A-REITs that invest soley or have a large portion of their portfolio in residential property?

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SGP do residential developments, but they also do Retail Centres, Office Blocks and Commercial/Industrial Centres.

clowboy said:

In short, not really, the best you can do is the likes of CWP who develop residential property (that is they sell residential land)

Click to expand...

nulla nulla said:

SGP do residential developments, but they also do Retail Centres, Office Blocks and Commercial/Industrial Centres.

Click to expand...

Thanks guys.

So there's not really a way to indirectly invest in property?

Does commercial property growth correspond closely with residential property? Hypothetically, when residential property experiences good growth, would investing in A-REITs give similar returns rather than having to buy an IP?

Tooth Faerie said:

Does commercial property growth correspond closely with residential property?

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No it doesn't, most REITS lost half their share price during the GFC, the losses were massive and some disappeared all together. Meanwhile residential property in Australia experienced nothing like those losses and in some of the big cities prices just kept on going up.

Tooth Faerie said:

So there's not really a way to indirectly invest in property?

Click to expand...

As mentioned, you can get exposures to residential properties by investing in residential developers. Companies like DVN, VLW, CWP, AVJ, FRI to name a few. Other names like MGR, SGP, SDG etc also develop residential properties as part of their diversified portfolios.

Tooth Faerie said:

Does commercial property growth correspond closely with residential property? Hypothetically, when residential property experiences good growth, would investing in A-REITs give similar returns rather than having to buy an IP?

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They do correlate... as the underlying drivers are similar. Namely, interest rates and general economic conditions. However, the actual "return" to your invested equity is very different due to leverage.

Bill M said:

No it doesn't, most REITS lost half their share price during the GFC, the losses were massive and some disappeared all together. Meanwhile residential property in Australia experienced nothing like those losses and in some of the big cities prices just kept on going up.

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Yes but that needs to be understood in the context of leverage and equity value. There's leverage internal to all REITs. You are buying the equity component of a REIT. When you consider a residential investment property, at LVR of 80%, a 15% fall in property prices is equivalent to a 75% fall in your equity, which is pretty close to the sort of fall experienced by the REITs during the GFC.

On the bright side...There's no margin call or mark-to-market in direct investment properties.

skc said:

As mentioned, you can get exposures to residential properties by investing in residential developers. Companies like DVN, VLW, CWP, AVJ, FRI to name a few. Other names like MGR, SGP, SDG etc also develop residential properties as part of their diversified portfolios.....

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Tamawood is another domestic one ASX:TWD

skc said:

As mentioned, you can get exposures to residential properties by investing in residential developers. Companies like DVN, VLW, CWP, AVJ, FRI to name a few. Other names like MGR, SGP, SDG etc also develop residential properties as part of their diversified portfolios.

Click to expand...

Logique said:

Tamawood is another domestic one ASX:TWD

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I will have a look at each of those in more detail. Thanks!

skc said:

They do correlate... as the underlying drivers are similar. Namely, interest rates and general economic conditions. However, the actual "return" to your invested equity is very different due to leverage.

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Does this mean that the return on A-REITs will be higher due to the higher internal leverage?

Bill M said:

No it doesn't, most REITS lost half their share price during the GFC, the losses were massive and some disappeared all together. Meanwhile residential property in Australia experienced nothing like those losses and in some of the big cities prices just kept on going up.

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It seems like residential property is a more "stable" investment, although you may not get a good return compared to other investment strategies depending on timing?

A-REIT Sector: Weekending Friday 30 January 2015

Share prices too high for me to buy. Spreads to thin for me to trade. More risk than reward at the moment.





The A-REIT Table for closing prices for Weekending 30 January 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 21 November 2014, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 21 November 2014. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal 2014 forecast earnings. These figures will be adjusted as and when Scentre/Westfields release their respective figures. SCG has advised on 6 November 2014 "Scentre Group reconfirms its forecast FFO of 10.88 cents per security with a distribution forecast of 10.2 cents per security for the six months ending 31 December 2014".

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

I've noticed the feel of reits have changed a little the last month or so.
I suspect they are going to underperform this year, may even turn out to be a bad sector.
Property crash?
Will be on the sidelines looking for it to start.

A bit of action with nvn and federation centres doing some sort of merger,

i wonder if the REIT sector is being driven also by the reduction of listed companies,

A-REIT Sector: Weekending Friday 06 February 2015

The recent A-REIT Sector share prices have helped propel the All Ords to new six year highs. Interest rates are low, yields are way better than bank interest rates and price earnings ratio's are relatively low. Federation Centres is proposing a merger with Novion and a few of the other share prices in the sector have jumped on the possibility that they too could become takeover targets.

Yield rates in the sector which were previously well above 5%, have mostly dropped with 50% of shares in the sector now below 5% as investors hungry for yield and safety have pushed share prices up. Price earnings ratios while still low are also edging higher.

Not that long ago several of the A-REIT's were trading at a discount to NTA, now most of them are trading at significant premiums to NTA. In some ways the present euphoria reminds me of 2007, however this time the gearing levels are below 35% and dividends are being paid out of earnings not borrowings. Where to now?




The A-REIT Table for closing prices for Weekending 06 February 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 21 November 2014, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 21 November 2014. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal 2014 forecast earnings. These figures will be adjusted as and when Scentre/Westfields release their respective figures. SCG has advised on 6 November 2014 "Scentre Group reconfirms its forecast FFO of 10.88 cents per security with a distribution forecast of 10.2 cents per security for the six months ending 31 December 2014".

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

nulla nulla said:

..... In some ways the present euphoria reminds me of 2007, however this time the gearing levels are below 35% and dividends are being paid out of earnings not borrowings. Where to now?

Click to expand...

And just as importantly the cap rates being applied for valuations are quite reasonable compared to pre GFC.
A 35% LVR on a cap rate of 5% is vastly different then a 35% LVR at an 8% cap rate.

Office vacancy rates are on the way down in capital cities as is vacancy in most shopping centres. Industrial is lagging in many areas but residential development is up .....All good for REIT's

A-REIT Sector: Weekending Friday 13 February 2015

Some A-REIT share prices further up and some drifting down a little. The half year results are starting to trickle out so I expect to be able to update the earnings data over the next week or so. At present the average of the price/earnings ratio's across the sector is 16.46. Some of the shares are higher than this, possibly a reflection of their size in the sector and market confidence in their growth prospects. Some of the shares have relatively low P/E ratios even though they have good earnings/yields, possibly reflecting a market perception of limited growth/take-over prospects.

The global cheap money flooding into the sector seems to have settled down for now. However I expect the market to be volatile for a while as it adjusts the share prices to the new levels. Trade opportunities for those with an appetite for risk?



The A-REIT Table for closing prices for Weekending 13 February 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 21 November 2014, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 21 November 2014. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal 2014 forecast earnings. These figures will be adjusted as and when Scentre/Westfields release their respective figures. SCG has advised on 6 November 2014 "Scentre Group reconfirms its forecast FFO of 10.88 cents per security with a distribution forecast of 10.2 cents per security for the six months ending 31 December 2014".

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

A-REIT Sector: Weekending Friday 20 February 2015

The All-Ords managed to hold above 5800 for the Friday close following the lead from the US with the Dow Jones above 18,000 and the Nasdaq creeping closer and closer to 5,000. However the A-REIT Sector took a contrarian approach and dropped roughly 2.8% for the week. The drop would have been more if not for the stability of Westfields as the likes of Abacus, Bunnings Property trust, Charter Hall, Dexus, Investa Office and SCA Property were sold down more than 5%.

There was probably a bit of profit taking on the back of the share price rise from the global cheap money that flooded into the sector in the previous weeks, bought on by jitters over the resurface of the Greek Euro Membership issue. The news from Europe is that Greece will be given another 4 months to address their problems which was warmly accepted by global markets overnight. It will be interesting to see where our markets go on Monday. Were the price falls on Thursday/Friday this week an entry opportunity or is it time to sit on our hands?



The A-REIT Table for closing prices for Weekending 20 February 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 21 November 2014, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 21 November 2014. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal 2014 forecast earnings. These figures will be adjusted as and when Scentre/Westfields release their respective figures. SCG has advised on 6 November 2014 "Scentre Group reconfirms its forecast FFO of 10.88 cents per security with a distribution forecast of 10.2 cents per security for the six months ending 31 December 2014".

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

A-REIT Sector: Weekending Friday 27 February 2015

The All-Ords squeaked above 5900 for the Friday close still following the lead from the Global Markets. Confidence and money every where however the week to week closing figures hide some individual share price swings as money moves in and out of the A-REIT sector.

Some of the price falls on Thursday/Friday last week turned out to be good entry points for quick trades. Some of them even providing a secondary opportunity mid week with good lifts on Friday for profit takers.




The A-REIT Table for closing prices for Weekending 27 February 2015 follows:


The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 21 November 2014, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 21 November 2014. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal 2014 forecast earnings. These figures will be adjusted as and when Scentre/Westfields release their respective figures. SCG has advised on 6 November 2014 "Scentre Group reconfirms its forecast FFO of 10.88 cents per security with a distribution forecast of 10.2 cents per security for the six months ending 31 December 2014".

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

A-REIT Sector: Weekending Friday 06 March 2015

The A-REIT Sector lifted strongly on Monday and Tuesday on the expectation of an interest rate cut. However, after 2:30pm, the news that there would be no change in the official interest rate saw a subsequent easing in share prices that continued through to Thursday close. Fortunately there was a small recovery on Friday which saw the A-REIT Sector finish the week slightly higher.

Once again the midweek volatility provided plenty of trade opportunities for the brave.




The A-REIT Table for closing prices for Weekending 06 March 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 21 November 2014, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 21 November 2014. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal 2014 forecast earnings. These figures will be adjusted as and when Scentre/Westfields release their respective figures. SCG has advised on 6 November 2014 "Scentre Group reconfirms its forecast FFO of 10.88 cents per security with a distribution forecast of 10.2 cents per security for the six months ending 31 December 2014".

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

Noticed in the SMH. Author optimistic on REITs. My bolds under.

Real estate investment trusts offer high returns for investors - 13 March 2015

By David Potts, SMH: http://www.smh.com.au/money/investi...gh-returns-for-investors-20150313-142zij.html

...I'm wondering whether all those investors who are ploughing into residential properties and upsetting in equal parts the Reserve Bank and first home buyers, might have caught the bus to the wrong bubble.

They wouldn't be getting anywhere near the rental yield that listed real estate investment trusts (REITs) earn – and higher still for unlisted ones – nor the contractual certainty of long-term tenancies...

Click to expand...

A-REIT Sector: Weekending Friday 13 March 2015

The A-REIT Sector fall on Monday (along with the All Ords) appeared excessive in comparison to the fall of the All Ords, so the subsequent recovery on Tuesday through Thursday was not entirely unexpected. However Friday saw some uncertainty work its' way into global markets. There seemed to be confusion as to whether the drop in US unemployment figures was a good thing versus the drop in the participation rate of the unemployed as a bad thing. This combined with falling Oil prices, falling commodity prices and China revising their expected growth rate down to 6.8% set a negative mood for Fridays trading.


I expect that next week will probably be just as volatile, likely with a downward trend for the week.



The A-REIT Table for closing prices for Weekending 13 March 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 13 March 2015, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 13 March 2015. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal 2014 forecast earnings. These figures will be adjusted as and when Scentre/Westfields release their respective figures.

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

A-REIT Sector: Weekending Friday 20 March 2015

This week the A-REIT sector started off with a double whammy, the RBA meeting minutes were released and there was a small paragraph to the effect that Glen Stevens felt that commercial/office properties were becoming overvalued. This combined with the release of reports in the media that analysts were predicting a 13% vacancy rate in A grade office buildings in 2015-2016, particularly in Sydney, saw the share prices of A-REIT's drop like a brick on Monday, Tuesday and Wednesday. Gloom and Doom.

However on Thursday and Friday the A-REIT Sector not only recovered the drop but lifted to finish the week 2% higher than the previous Fridays close. The surge in prices in the closing stages of Friday trading was impressive. Last week I predicted volatility with a likely down ward trend. This week I'll keep my predictions to myself, other than to say it will probably continue to be volatile.

There appears to be a pattern emerging for the A-REIT sector over the past 2-3 months, with support at the 1280 level and resistance at the 1345 level. I don't know how reliable it is, I did get a bit nervous when the market tested 1268 on Wednesday.



The A-REIT Table for closing prices for Weekending 20 March 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 13 March 2015, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 13 March 2015. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal 2014 forecast earnings. These figures will be adjusted as and when Scentre/Westfields release their respective figures.

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

A-REIT Sector: Weekending Friday 27 March 2015

On Wednesday night while Australian equities investors were sound asleep, tucked up snuggly in their beds, U.S and European Investors were staging a mass sell down as "cracks" were seen to be appearing in the purported health of the U.S recovery. The Bears were rumbling that the company reports were not as good as expected and the pervading mood was "sell". On Thursday the Australian All-Ords was swept along with the negativity of global markets. The All-Ords dipped 73 points soon after open, recovered 30 odd points and then fell to end the day 80 points down. The A-REIT sector was smacked even harder, finishing the day down nearly 2%.

Was this a buy opportunity or the start of something bigger like a correction? The A-REIT sector staged a mild recovery on Friday morning but by 1:00pm it ran out of confidence and gave back some of the earlier recovery.

There are take-over rumours circulating that Investa Office is on the market. The big players, Dexus, GPT, and Stockland are allegedly suitors circling IOF. Mirvac also is reported to have hired consultants to help it defend itself in the event it is targeted for take over. No doubt this speculation will add to the share price volatility. Next week will be interesting.





The A-REIT Table for closing prices for Weekending 27 March 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 13 March 2015, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 13 March 2015. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal for 2014 forecast earnings. These figures will be adjusted as and when I have the chance to read the now released Scentre/Westfields 2014 figures.

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

A-REIT Sector: Weekending Thursday 02 April 2015

A short week and the A-REIT Sector dipped below the support line before a tentative recovery on Thursday. Nervous volatility causing some impressive inter-day swings. Sometimes it is hard to work out whether you should trade long (for a short period) or trade short (for a long period). Perhaps safer to sit on the sidelines until the confidence in the U.S. recovery returns and Greece is either in the EU or not? Next week will be interesting, another short week.





The A-REIT Table for closing prices for Weekending 02 April 2015 follows:




The comparison table of this weeks closing prices versus last weeks closing prices follows:





Comments:

1. The shares listed in the tables above make up the XPJ A-REIT Property Sector.

2. The "Capital" figures in the above tables are "market capital" based on the "issued shares" as distinct from "free float capital". The "issued shares", updated as at 13 March 2015, can change from day to day due to active share buy-back programs and other factors.

3. The "Earnings", "Distribution" and "NTA" figures have also been updated as at 13 March 2015. "NTA" figures are subject to change every time there is a property re-valuation and the table may be out by a few cents from time to time, which effects the "Premium to NTA" also.

4. The table figures for SCG and WFD are based on the proposal issued 4 December 2013. The issued shares are correct but the Earnings and Distributions are based on the December proposal for 2014 forecast earnings. These figures will be adjusted as and when I have the chance to read the now released Scentre/Westfields 2014 figures.

5. The share codes listed in both Tables now hyper-link to the last page (mostly) of the corresponding ASF thread for that share.

6. Inclusion of any share details in the above tables is not an endorsement of that share as a viable investment or possible trade.

Disclaimer: These tables may contain errors and should not be relied upon for investment decisions. As always, do your own research and good luck .

p.s: It seems since 13 March 2015 I may have been overstating Cromwell's distribution and yield. it would seem that there can't be too many Cromwell followers reading the thread as it has gone unnoticed for three weeks.