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10 largest Australian REITs to watch

REITs give retail investors the opportunity to acquire exposure to the property sector using instruments that are comparatively liquid and easy to acquire.

Source: Bloomberg

REIT is an acronym for the term 'real estate investment trust' – a company that owns or finances a portfolio of property assets that generate income in the form of rent.

A-REITs: what you need to know

A REIT is akin to a mutual fund, in that it brings together funds supplied by multiple investors to channel towards income-generating assets. REITs differ from other types of investment funds, however, in confining themselves to real estate assets.

One of the chief advantages of REITs is that they make is that they provide small-scale retail investors with a quick and convenient means of acquiring exposure to the property market.

Real estate assets are in general large and illiquid, making it both costly and time-consuming for investors to either acquire or dispose of them. With a REIT, however, investors can simply grab an equity stake in a company that holds or funds such real estate assets, giving them the ability to invest small sums in a tradable financial asset that is far more liquid than a house or an office complex.

Shares in most REITs are publicly traded on securities exchanges, making them highly liquid instruments that can be purchased and sold with ease.

The ease of investing in REITs has helped 'democratise' property investment by making it accessible to mom-and-pop investors. Prior to the launch of REITs in the US in the 1960s, investment in commercial real estate was considered the exclusive preserve of institutional investors and high net-worth individuals.

Other advantages of REITs include specialist management teams who are responsible for day-to-day handling of the properties; high occupancy rates of over 90% and gearing of between 10% and 30%.

While they confine themselves to real estate investment, REITs cover a broad range of property types, including residential apartments, hotels, healthcare facilities, office complexes, shopping centres and warehouses.

REITs also invest in infrastructure assets, including fibre cables, energy pipelines and cell towers.

REITs first emerged in the US in the 1960s, after Congress made an amendment to the Cigar Excise Tax Extension in 1960 that allowed investors to purchase shares in commercial real estate portfolios.

They first reached Australia's shores in 1971 with the launch of the General Property Trust. The REIT market saw rapid growth over subsequent decades, reaching $43 billion in 2002, before doubling over the following decade to $90 billion by 2012.

As of March 2023, the market capitalisation of REITs in Australia was $144.5 billion, according to figures from REITs in Australia are not confined to investment in domestic properties but are also permitted to take stakes in real estate assets that are located offshore.

Here is a list of 10 of the largest REITs listed on the ASX, for those investors who hope to use them as a channel for gaining exposure to the property market both in Australia and abroad.

10 largest A-REITs to watch

The following A-REITs are not investment recommendations. They are simply the largest by market capitalisation on the ASX.

  1. Goodman Group
  2. Scentre Group
  3. Stockland
  4. Vicinity Centers
  5. GPT Group
  6. Mirvac Group
  7. Dexus Property Group
  8. Charter Hall Group
  9. Lendlease Group
  10. National Storage

Goodman Group (GMG)

Goodman Group is a global property group that specialises in commercial and industrial real estate, including warehouses, large-scale logistics facilities and business and office parks.

Its portfolio of properties is spread across 14 countries, while investors in GMG include sovereign funds, pension funds and large multi-manager funds. The company is by far the largest ASX property group, with 1,700 customers and $76.3 billion in external assets under management.

February's interim results saw Goodman's profits rise by 29% to $1.13 billion.

Goodland has a market capitalisation of $65.96 billion.

Scentre Group (ASX: SCG)

Scentre Group bills itself as the owner and operator of the leading shopping centre portfolio in Australasia.

According to SCG, its retail real estate assets under management are valued at $50.8 billion, while its shopping centre ownership interests are valued at $34.7 billion.

Chief amongst these retail assets are 42 Westfield shopping centres, within close proximity to over 20 million people. Scentre Group retail tenants renting these sites posted record sales of $28.4 billion in CY23.

Scentre has a market capitalisation of $16.21 billion.

Stockland (ASX: SGP)

Stockland is a diversified REIT that invests in a broad range of commercial and residential property, including standard residential and retirement living villages, as well as workplace and logistics sites.

SGP bills itself as a leading residential developer in Australia, with a focus on master-planned communities and the country's medium-density growth areas.

In half-year results, new sales inquiries rose by 20% as rate expectations stabilised, though earnings were arguably disappointing.

Stockland has a market capitalisation of $10.67 billion.

Vicinity Centers (ASX: VCX)

Vicinity's portfolio includes some of Australia's most iconic retail destinations, including the Queen Victoria Building in Sydney and Chadstone in Melbourne. It has 60 shopping centres under management, housing around 7,000 retailers.

Impressively, the REIT believes that over 64% of Australians live within a 30 minute of one of its properties. In half-year results, Vicinity saw statutory net profit after tax of $223.5 million.

Vicinity has a market capitalisation of $8.63 billion.

GPT Group (ASX: GPT)

GPT Group is one of Australia’s largest property groups, managing $32.6 billion worth of assets across the country. It owns, develops and manages a high quality portfolio of office, retail and logistics assets. ESG leadership is a core strategy pillar of the REIT, with a carbon neutral climate response a central commitment.

However, the A-REIT suffered a $240 million loss as property values cooled in H1.

GPT Group has a market capitalisation of $7.99 billion.

Mirvac Group (ASX: MGR)

Mirvac Group is a diversified property group with over four decades of experience in the Australian real estate market. Its $26 billion of assets under management and $17 billion of third party capital under management is situated primarily in the four state capitals of Sydney, Melbourne, Brisbane and Perth.

The businesses’ assets cover the full gamut of the office, retail and industrial sectors. It's currently divesting of non-core assets to refocus its portfolio.

Mirvac has a market capitalisation of $7.46 billion.

Dexus Property Group (ASX: DXS)

Dexus's portfolio encompasses some of the most distinctive office sites in downtown Sydney and Melbourne. These include Central Place Sydney, 80 Collins St, Melbourne, 60 Collins St., Melbourne, and 25 Martin Place in Sydney.

Dexus directly owns $15.8 billion of office, industrial, healthcare, retail and infrastructure assets and investments and manages a further $41.3 billion of investments in its funds management business.

Dexus has a market capitalisation of $7.22 billion.

Charter Hall Group (ASX: CHC)

Charter Hall Group was the largest real estate investment manager in Australasia in terms of assets under management as of 2022, according to figures from Institutional Real Estate Inc, with $83.4 billion AUM.

Its investments are almost exclusively situated in Australasia, with key properties including Citigroup Centre in Sydney; 555 Collins Street in Melbourne, the Brisbane Administration Centre and Brisbane Square Tower 2.

Charter Hall has a market capitalisation of $5.90 billion.

Lendlease Group (ASX: LLC)

Lendlease bills itself as a globally integrated real estate group, with flagship development projects in some of the world's leading cities.

These include the Barangaroo precinct in Sydney, London's Elephant Park urban renewal project, Singapore's Paya Lebar Quarter, Boston's Clippership Wharf, and a $20 billion urban renewal project covering four districts in the San Francisco Bay Area.

According to LLC, its global development pipeline is currently worth more than $100 billion.

Lendlease has a market capitalisation of $3.84 billion.

National Storage (ASX: NSR)

National Storage REIT offers self-storage solutions to approximately 95,000 residential and commercial customers at more than 235 storage centres across Australia and New Zealand.

This spans self-storage, business storage, climate-controlled wine storage, vehicle storage, vehicle and trailer hire, packaging, insurance and other value added services. The REIT can be popular as few competitors offer exposure to the growing self-storage sector.

National Storage has a market capitalisation of $3.08 billion.

Past performance is not an indicator of future returns.

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