A-REITs top performers

BDO’s latest annual survey showed industrial real estate investment trusts were performing strongly, with a 26 per cent return in the year to June on the back of the e-commerce boom.

Now in its 24th year, the survey ranks the S&P/ASX 200 A-REIT Index trusts based on key financial and investment indicators in the 12 months to June 30 each year.

Australian real estate investment trusts with industrial properties were the best performers in this year’s survey, with Centuria, Industria, Charter Hall Group and National Storage all ranking in the top 10.

The S&P/ASX 200 A-REIT Accumulation Index showed listed property trusts delivered a total return of 13.2 per cent over the 2018 financial year, in line with the broader market. This was a rebound for the sector after the negative 6.3 per cent return in 2017.

Online shopping accounts for more than $23 billion annually in Australia, and the need for warehouse space is at an all-time high. Retailers rely on supply-chain efficiency to deliver goods with speed, and this has had a big effect on the industrial property market which has spilled over into demand for the Industrial REITs.

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The same e-commerce trends continue in the retail sector, with a healthy 14.1 per cent return. Flagship assets and those weighed towards non-discretionary retail had strong reporting seasons as they diversify and differentiate from the online market.

The pub sector continues to perform well, with ALE Property Group coming in at number one in the survey, up from second place last year and in the top three for the fourth consecutive year.

In the office market, assets in the Sydney and Melbourne markets are benefiting from high occupancy rates and stable income.


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