The Australian real estate investment trust – or A-REITs – sector is not spoken of as a great prospect at the moment, being caught between a rising bond yield environment globally, and low inflation domestically. Earnings growth figures for the REIT sector is expected to be flat in FY17, although unfranked yields in the 5%–6% range keep many of the major trusts well supported: however, fairly full pricing is par for the A-REIT course at present.
But here are five prospects where the total return opportunity – capital growth plus distribution yield – gives a slightly better picture for investors.
Westfield Corporation (WFD) $9.01
Market capitalisation: $18.3 billion
Forecast FY17 yield: 3.4%, unfranked
Analysts’ consensus target price: $10.19 (FN Arena)
Implied upside: 13.1%