A number of specialty REITs have come to the market offering pure-play exposure to ‘big-box’ retail properties, healthcare properties, retirement and aged care properties, childcare properties, tourism properties, hotels, agribusiness and even data centres.
APDC Group is a great example of a tech REIT investing in data centres that is doing better than the data centres themselves.
Other speciality REITs include, Bunnings Warehouse Property Trust, Generation Healthcare REIT and Hotel Property Investments.
One of the recent developments on the Australian stock market is specialty real estate investment trusts (REITs), outside the normal categories of office, retail and industrial property.
Specialty REITs have come to the market offering pure-play exposure to ‘big-box’ retail properties, healthcare properties, retirement and aged care properties, childcare properties, tourism properties, hotels, agribusiness and even data centres. The trusts offer investors targeted exposures to the sectors they wish to invest in.
A couple of weeks ago (4 May) I mentioned the specialty REITs National Storage REIT (NSR) – which invests in self-storage centres – and Ingenia Communities Group (INA), which owns a portfolio of “seniors living” properties. Here are five more specialty REITs, from a wide variety of sectors.
1) Bunnings Warehouse Property Trust (BWP)
Market capitalisation $1.98 billion
Bunnings Warehouse Property Trust was the first of the specialty REITs: it was listed in September 1998 to focus on “big box” warehouse retailing properties and, in particular, Bunnings Warehouses leased to hardware giant Bunnings Group, a wholly-owned subsidiary of Wesfarmers Limited (WES).
The $1.9 billion property portfolio consists of 83 properties, spread across Western Australia, Victoria, New South Wales, Queensland, South Australia and the Australian Capital Territory. Most have a Bunnings Warehouse on them, but several are multi-tenanted, including retail space leased to other retailers, for example, Officeworks, Boating Camping Fishing (BCF), Ultratune, Spotlight, Sleepmaster and The Good Guys.
BWP has been a strong performer on the stock market, generating a total return (capital gain plus dividends) over the last five years of 18.2% a year. On the analysts’ forecasts collated by FN Arena, analysts expect a 15.8-cent distribution (dividend) in FY15, increasing to 16.6 cents in FY16. That prices BWP on an unfranked FY15 yield of 5.1%, rising to 5.4% in FY16.
However, the analysts’ consensus target price does not make good reading for BWP holders: at $3.10, the analysts think it has 17.4% downside to its target price of $2.56.
Source: Yahoo!7 Finance, 18 May 2015
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