Finding value in the Australian Real Estate Investment Trust (A-REIT) sector is hard work. Falling interest rates and the hunt for yield have sparked A-REIT outperformance this year.
The S&P/ASX 300 A-REIT index has a total return of 23% (including distributions) over one year, S&P Dow Jones Indices data shows. The ASX 200 is up almost 17%.
Over 10 years, the A-REIT index’s annualised return of 11.5% compares to 7.8% for the ASX 200. Care is needed with index comparisons: the market-weighted property index is influenced by some large A-REITs, but the case for long-term property exposure remains compelling.