Australian (ASX) Stock Market Forum

A-REITs

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Belli said:
Or the mug punter could simply buy the lot via these.

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i have held SLF in the past , and although i exited in profit , it wasn't really doing what i wanted to achieve at the time , AND i already held the bits i liked best of the portfolio at the time separately ( the basket has changed a fair bit over the last 10 years )
 
Morgan Stanley wrote a report in late March analysing the $75 billion of debt issued by REITs that it covers to “assist investors in identifying companies that may be exposed if some form of credit crunch were to seep into Australia”.

The report found which REITs had :
  • the highest gearing (Scentre, Centuria Office, Region Re)
  • the lowest interest coverage ratios (Scentre, Centuria Industrial, Lend Lease),
  • the most immediate refinancing (HMC, Centuria Capital, Stockland) and
  • the most offshore debt (Scentre, Lend Lease, Goodman).
L
 
[with 10 year benchmark bonds hitting highs not seen for many years, a]nything on the ASX that looks, swims or quacks like a bond is being sold.

And when it comes to bond proxies, Australian equities investors typically think three things: REITs, infrastructure (not that there is much left on the ASX boards) and Telstra.

And by far the biggest bucket is the A-REIT sector.

Investors tend to buy the REITs for their distribution; when distribution yields are well above expected bond yields and cash rates, they’re buying REITs and waiting to collect the distributions. When they’re not, investors are selling REITs and buying cash or bonds.

.. and that's happening now!

The sell-off is just the latest blow for the listed property sector already facing headwinds such as rising interest rates, changing work patterns and a weakening consumer environment.
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SPJ in blue, XJO in red
Screenshot_20231004-182747_CommSec.jpg
 
Dona Ferentes said:
[with 10 year benchmark bonds hitting highs not seen for many years, a]nything on the ASX that looks, swims or quacks like a bond is being sold.

And when it comes to bond proxies, Australian equities investors typically think three things: REITs, infrastructure (not that there is much left on the ASX boards) and Telstra.

And by far the biggest bucket is the A-REIT sector.

Investors tend to buy the REITs for their distribution; when distribution yields are well above expected bond yields and cash rates, they’re buying REITs and waiting to collect the distributions. When they’re not, investors are selling REITs and buying cash or bonds.

.. and that's happening now!

The sell-off is just the latest blow for the listed property sector already facing headwinds such as rising interest rates, changing work patterns and a weakening consumer environment.
.
SPJ in blue, XJO in red
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yes , exciting isn't it

now the trick is to accumulate the REITs in niches that are going to do well , or at least not get squeezed for income
interesting times

let's see which niches are still vibrant
 
yes indeed , but which trees will fall over first ( from a rotted trunk )

will be an excellent educations for the younger novices as fell ( those who grew up in 'property prices never fall ' era )
 
finicky said:
DXS,
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Dexus 's return may be down 12 % for the year , but when you add the ever reliable distribution into their own published performance , it's just half that . ( Close to - 6.3 % )
Still not cheap enough for me to think about additional investment.
Over a ten year period , my performance calculations are pretty close to DXS 's claimed 10 % p.a. compound. About the same for good Industry super funds ( without their better tax structure , of course. )
The trick with well managed R.E.I.T 's , is to think of them like other R. E. held in your own name. Hold for the long term . Allow time for the magic of compounding to kick in .
 
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All my followed REITs up again today and mostly beating the XAO rise easily.
I only hold ABG and ASK, currently thinking of DXS and CHC but very unfamiliar territory for me. Attracted by them being out of favour and with depressed share prices. Greg Canavan has suggested a few and has current buys on DXS and ABG but they are at lower prices now than at the time of his initial alert. He also has a buy on FBU (building) which I guess is related.
 
finicky said:
All my followed REITs up again today and mostly beating the XAO rise easily.
I only hold ABG and ASK, currently thinking of DXS and CHC but very unfamiliar territory for me. Attracted by them being out of favour and with depressed share prices. Greg Canavan has suggested a few and has current buys on DXS and ABG but they are at lower prices now than at the time of his initial alert. He also has a buy on FBU (building) which I guess is related.
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i went for CLW ( and am still very carefully adding ) in preference to CHC

i hold ASK and ABG , i am thinking storage facilities is a potential growth area and should be able to re-purpose in very necessary

i hold FBU but expect lower in the near term ( too many difficult cost factors )
 
dyna said:
The trick with well managed R.E.I.T 's , is to think of them like other R. E. held in your own name. Hold for the long term . Allow time for the magic of compounding to kick in .
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I gave up on A-REITs when the 'magic' turned out to be sleight of hand. They don't hold the assets for the long-term but instead drive depreciation rates as hard as they can to capture notional returns. When the schedules are exhausted, then they flip properties. Because the numbers are not so good then.

Toss in gearing, leverage, to add some juice, but that can turn and quickly when rates do or refinancing dries up.

All in all, not 'set n forget' by any means. They may have a role, but not in my portfolio.
 
Dona Ferentes said:
( or earlier REITs when the 'magic' turned out to be sleight of hand. They don't hold the assets for the long-term but instead drive depreciation rates as hard as they can to capture notional returns. When the schedules are exhausted, then they flip properties. Because the numbers are not so good then.

Toss in gearing, leverage, to add some juice, but that can turn and quickly when rates do or refinancing dries up.

All in all, not 'set n forget' by any means. They may have a role, but not in my portfolio.
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MGR and SGP have steady place in my holdings ( BWP and RGN as well ) ( SGP, BWP and RGN are all DRPed )
but the times are a changing , maybe the flexible strategies are a good thing in some niches

like who picked the office space chaos in 2019 ( or earlier ) , i didn't , i wasn't convinced on the 'inner-city living ' trend , but 'work-from-home ' totally left-field for me , luckily i wasn't seeing the numbers i wanted to load up on that office space niche

but agreed plenty of risk in the REIT sector , but can you get adequate reward for the risks taken ( in an inflation-stressed world )
 
not a sector I hold .. phew !!
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From around the traps, some general commentary :
"The next six months cannot pass soon enough for the REITs. You could tell from the chief executives that they expect further valuation cuts in the coming six months, making it hard for them to attract equity investors and close dogged discounts to net tangible asset value.

"The REITs have a chicken-and-egg problem: they can’t buy assets while those NTA discounts linger, but the valuers keep chopping valuations because there are few/no strong deals in the sector.

"What’s the fix? Everyone’s waiting for big offshore private capital buyers – sovereign wealth funds, pension funds, asset managers. Dexus’ outgoing boss Darren Steinberg reckons they’re arriving in greater numbers kicking tyres, but the whole sector needs them to start writing cheques..."
 
Trusts trading ex-distribution:

Wednesday, 27 March:
Waypoint REIT (WPR) – $0.04,
Garda Property (GDF) – $0.016,
Rural Funds (RFF) – $0.02,
Dexus Convenience Retail REIT (DXC) – $0.05,
360 Capital REIT (TOT) – $0.015,
360 Capital Mortgage REIT (TCF) – $0.035,
Centuria Office REIT (COF) – $0.03,
Centuria Retail REIT (CIP) – $0.04,
Australian Unity Office Fund (ARF) – $0.015,
Arena REIT (ARF) – $0.04
 
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The cheapest stocks in the ASX Real Estate sector based on Price to NTA​


www.marketindex.com.au

The cheapest stocks in the ASX Real Estate sector based on Price to NTA

Major broker Morgan Stanley suggests conditions in the Australian Real Estate Investment Trust sector have stabilised. One of the hardest hit segments, office, now “looks cheap”.
www.marketindex.com.au www.marketindex.com.au

of those mentioned , i hold MGR ( 'free-carried' ) CLW , SGP , RGN , and GPT

please note i do not buy REITs based on NTA , but rather distribution yield and the niche( s ) they operate in
 
some are saying the sector is turning. .. off the lows, as interest rates change direction, making cap rates more attractive

from Market Index

Real Estate Investment Trusts (XPJ) (+1.7%) was the best performing sector today, likely in response to a research note from major broker Morgan Stanley titled "Reflecting Inflexion" in which it increased its price target on 21 stocks within the sector. The broker cited falling interest rates / market yields for its moves (see – I keep telling you the XPJ is the most interest rate sensitive sector!)

We have all the details for you of Morgan Stanley's price changes in today's Broker Moves section, but for now note the the biggest increases were reserved for Centuria Capital Group (ASX: CNI) (+25.6% retained OVERWEIGHT rating), Stockland (ASX: SGP) (+19.8% retained OVERWEIGHT rating), Charter Hall Long Wale Reit (ASX: CLW) (+18.2% retained EQUAL-WEIGHT rating), and Lendlease Group (ASX: LLC) (+15.7% retained EQUAL-WEIGHT rating).

full Broker Moves found here
www.marketindex.com.au

Evening Wrap: ASX 200 edges higher on big broker price target hikes in property sector, uranium and copper slow burn continues

#asx #asxnews #shares #sharemarket #stocks #stockmarket #uranium #lithium #ironore #copper #gold #silver #investing #trading #marketwrap Overall a quiet session, just 7 points to the better for the benchmark S&P/ASX 200, as we wait patiently for fund managers to sort out their rotations in a...
www.marketindex.com.au www.marketindex.com.au
 
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