Traditional REITs are back on top in Australia
Traditional REITs return to the top in BDO’s annual survey
Australian Real Estate Investment Trusts (A-REITs) delivered another strong performance in the 2016 financial year, with ‘traditional’ commercial property trusts returning the top 10 in the annual BDO A-REIT Survey.
The survey conducted by BDO Australia is now in its 22nd year. It ranks the S&P/ASX 200 A-REIT Index trusts based on key financial and investment indicators in the 12 months to 30 June 2016.
The trusts had a total return of 24.6% in the 2016 financial year, following a 20.2% total return in 2015 and an 11% total return in 2014. The low Australian interest rate environment continued to provide a significant boost to the sector as the market-enduring high yields and solid returns proved attractive to investors.
Bond yields will continue to put pressure on the value of listed property stocks, however, despite the ongoing risk AREITs should still prove popular with investors because of strong underlying fundamentals. The current short-term market volatility doesn’t stop them being an attractive buy and continued low interest rates means there’s likely to be ongoing success for the sector. In addition to showcasing the top 10 performing A-REITs, BDO’s report also includes insights from the senior management of the top performers.
These insights not only show how A-REITs are attracting and retaining capital, but also how they view the outlook for the sector and the challenges they face in continuing the recent stability and growth in the sector.
Download the 2016 BDO A-REIT Survey and insights from the top performing A-REITs HERE.