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A-REITs

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Gnomes of Aussie

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Australia has 61 Listed Real Estate Investment Trust. Among these trusts, 38 of them are sold under their book value:
AAD, ABP, AGJ, LEP, AEZ, APZ, ALZ, AEU, CDP, CET, CFX, CDI, CWT, CHC, CQO, CQR, CKP, CNR, CXH, GPM, GPT, IEF, IHF, IIF, IOF, LLA, MG, MIX, RPF, RBV, RCU, RNY, SGP, THG, TSO, TCQ, VPG, WDC

Among these, 4 of them are sold below their cash position:
AEZ, MIX, RPG, TCQ

However, all of these 4 trusts are losing money in last financial year. Maybe that the reason they have a lot of cash by selling their assets to stay liquidity.
 
I have followed AEZ, RPG & TCQ, i have them on a property watchlist and have followed for over 2 years...as you have pointed out they all have big debt issues and are 100% reliant on there financiers to keep trading.

I have resisted the temptation to take the punt and buy into one of them as i have already had one 100% loser in the sector and don't fancy a repeat...thus preferring the easier and lower risk options higher up the AREIT food chain where most stocks are trading in ranges giving ample opportunity for low risk, small profits.
 
Dona Ferentes said:
View attachment 103967

Office A-REITs: will city towers full of workers continue to be the model, or will decentralisation and working from home be the future?
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I have heard discussions about workers being relocated to empty space in shopping centres which were aplenty even before the coronavirus.

I doubt if working from home will take off as most workers are too lazy to work if they can get away with it. I'm not having a go. I wouldn't work neither if I were in their shoes.

gg
 
Garpal Gumnut said:
I have heard discussions about workers being relocated to empty space in shopping centres which were aplenty even before the coronavirus
Click to expand...

Common practice in the Philippines, many call/contact centres located in shopping malls, fulfilment centres come to mind as well, lots of floor space in those soon to be empty Targets.

REIT's in general though will be hard hit, revenues and thus profits will be down for the next couple of years at least, wouldn't surprise me to see many pay no dividend/distribution next FY.
 
Garpal Gumnut said:
Why has CHC done better than the other REIT's?
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Doing best are
diversified blue chip trusts whose underlying assets have long leases, such as Charter Hall Long WALE* with average leases of more than 14 years.
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*Weighted Average Lease Expiry

So, guaranteed future income flows for longer .... with implication some of the other trusts have lower quality tenants, shorter leases and probably not A grade stock.

Also the sub-lease availability is highest for a long time, so there may well be further exit from B and C grade locations and aged stock, into the newer prestige addresses.
 
The medium-term outlook for office space has competing challenges
- more people are likely to be working from home resulting in less space demand
- the need to allow for more space per person in offices for health reasons resulting in more space demand.

About two-thirds of employers allowed employees to work from home before the crisis; the issues upon return are largely those of scale and configuration, according to scenarios being considered, and include:
1. Configuration of offices, role of head offices, leasing arrangements and the need for back-up locations for critical business.

2. Office space to ensure some level of comfortable density that limits transmission of disease, which could lead to greater flexibility and possibly more office sites.

3. Remote offices away from the head office where employees can drop in between seeing clients, or to meet clients.

4. Qantas Club-style offices based in convenient locations where employees can drop in. Corporate tenants are also likely to require greater flexibility in leasing arrangements to accommodate more employees for special projects.
5. Offices in locations with increased parking to allow employees to drive to work because of constraints on numbers allowed to use public transport, leading to increased decentralisation and increasing attraction of fringe and metropolitan office locations.
6. A big increase in the growth of flexible accommodation spaces, such as Regus and WeWork, which provide shared workspaces.

7. Wider corridors with one-way foot traffic, better air filtration, touchless elevator controls and video conferencing, even with the office, to avoid conference rooms.

Of course, all this only concerns the footprint, but untouched and probably more important are transport and telecommunications.
 
Dona Ferentes said:
The medium-term outlook for office space has competing challenges
- more people are likely to be working from home resulting in less space demand
- the need to allow for more space per person in offices for health reasons resulting in more space demand.

About two-thirds of employers allowed employees to work from home before the crisis; the issues upon return are largely those of scale and configuration, according to scenarios being considered, and include:
1. Configuration of offices, role of head offices, leasing arrangements and the need for back-up locations for critical business.

2. Office space to ensure some level of comfortable density that limits transmission of disease, which could lead to greater flexibility and possibly more office sites.

3. Remote offices away from the head office where employees can drop in between seeing clients, or to meet clients.

4. Qantas Club-style offices based in convenient locations where employees can drop in. Corporate tenants are also likely to require greater flexibility in leasing arrangements to accommodate more employees for special projects.
5. Offices in locations with increased parking to allow employees to drive to work because of constraints on numbers allowed to use public transport, leading to increased decentralisation and increasing attraction of fringe and metropolitan office locations.
6. A big increase in the growth of flexible accommodation spaces, such as Regus and WeWork, which provide shared workspaces.

7. Wider corridors with one-way foot traffic, better air filtration, touchless elevator controls and video conferencing, even with the office, to avoid conference rooms.

Of course, all this only concerns the footprint, but untouched and probably more important are transport and telecommunications.
Click to expand...
FWIW, as a startup founder/user, wework style offices are the way to go, providing office as a service: need more room for a project, a meeting room, lease ad hoc
This is the way to go for flexible agile companies
 
You wouldn't think Real Estates are a good investment atm? Wages and Inflation is squeezing Businesses so they would be pushing back against rental increases and even absorbing some of the blow? Maybe downsizing.
Once the downturn starts, it'll get even worse.
 
CHC looks to be about the right price, there always seems to be some potential negatives around real estate and yet it just keeps on going.

60% of their net income is from their top 20 clients, Fed Govt, Coke, Telstra, Amazon, BP, CBA, Woolies, Ampol, Inghams, etc etc - big players.
 
Mohammed Hazabig'un said:
You wouldn't think Real Estates are a good investment atm? Wages and Inflation is squeezing Businesses so they would be pushing back against rental increases and even absorbing some of the blow? Maybe downsizing.
Once the downturn starts, it'll get even worse.
Click to expand...
valid points , but several are over-priced ( compared to when i bought in )

and solid REITS are often seen as 'bond proxies ' a reasonably stable return ( but less likely for capital growth )

are worse prices a bad thing ( as long as they can maintain returns )

i have been very cautiously nibbling at these ( wary of a credit crunch )

not the dirtiest shirts in the laundry ( basket )
 
divs4ever said:
and solid REITS are often seen as 'bond proxies ' a reasonably stable return ( but less likely for capital growth
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yields on commercial real estate, which have fallen to about 4 per cent, don’t offer investors a sufficient risk premium at a time when the yield on Australian 10-year bonds is 3.3 per cent.
 
i disagree , but i am carefully adding ones that the market is bashing

i am expecting extraordinary terms to be added to existing ( low rate ) bonds even in Australia
 
There's a bit of wishful thinking from deal-makers that A-REITs are trading below NTA and that they should just go in there and buy some (or, better, persuade some deep pocketed mug to do so).

Some current discounts are as follows:
1675209117668.png

Now, with Covid dislocations causing distortions, especially in retail and office subsectors, I'd also think uncertainty on long term interest rates would cause some element of discounting.
 
i hold ( that are mentioned on the list )

RGN ( av. SP $1.55 )

SGP ( av. SP $3.32 )

MGR ( av. SP $1.10 )

CLW ( av. SP $4.20 ) am watching/waiting before adding extras here

GPT ( av. SP $4.39 )

ABP ( av. SP $2.98 ) am looking to top up somewhere in the $2.60 - $2.70 range

am carefully cherry-picking my way through this sector ( sometimes into weird niches )
 
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