Listed A-REITs Metrics - October 2022

We have reviewed some key trading metrics to see how the listed property securities are performing on a sector-by-sector basis, based on closing prices at 19 October 2022. Some of the key findings are summarised below:
  • Specialist REITs are trading either at a premium (ARF), or smaller discount, to NTA than the other property sectors. The stronger relative pricing we believe is being driven by the lower discretionary nature of the assets within this sector, such as childcare (Arena REIT), Bunnings warehouse properties (BWP Trust) and self-storage (National Storage).
  • Office is generally trading at the largest discount to NTA as the market is factoring in higher vacancy rates as a result of changing office demand due to increased levels of working from home, and a softening of capitalisation rates.
  • Within the retail sector, REITS with higher levels of non-discretionary retail such as SCA, are trading at lower discounts to NTA than more traditional retail REITs.
  • The Industrial sector remains in high demand as investors seek to back well-located properties which are integral to the supply chain of goods in the economy. Many of the diversified REITs are significantly increasing their investments into industrial real estate.
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