BDO A-REIT Survey 2019

Shapeshifting shakes up the sector

Findings from BDO’s 25th Annual Survey of Australian Real Estate Investment Trusts

BDO releases the annual Australian Real Estate Investment Trust (A-REIT) Survey Results.

The A-REIT Survey 2019 - now celebrating its 25th year - tracks the dynamic listed Australian property industry by ranking the S&P/ASX 200 A-REIT Index trusts based on key financial and investment indicators over the 2019 financial year.

Overall, we have seen another solid year of performance for A-REITs. The S&P/ASX 200 A-REIT Index outperformed the S&P/ASX 200 Index by 6.2 per cent, generating a total return of 13.4 per cent over the 2019 financial year. This is a slight increase of 0.2 percent as total returns across the 2018 financial year were 13.2 per cent.

Category Performance Overview

The industrial category was the leading performer of all A-REIT category’s in FY19, with an overall return of 55.8 per cent compared to 26 per cent in FY18. Retail REITs were the poorest performers of FY19, with negative returns.

This year, we are witnessing asset shapeshifting across all categories – that is adaptation of traditional real estate assets - as e-commerce continues to drive demand for industrial and logistics space, while softening business conditions and a cooler economic climate impact on the retail and offices markets.

One of the major concerns for the industry is the impact that weak levels of economic activity will have on A-REIT performance.

“Although we believe capital values will continue to demonstrate growth, the clear risk to all categories in our view is the weak economic activity and the impact this has on the confidence of tenants and their resultant decision making.”
– Garda Diversified Property Fund

Opportunities in the market brought on by changing demographics are also seeing a trend toward social infrastructure investments.

“There is increasing interest in the social infrastructure property category both domestically and offshore as investors better recognise the growing accommodation needs for services as a result of population growth and changing community needs; as well as investors seeking diversification from traditional property assets such as retail, office and industrial.”
– Arena REIT Management

For more information, download the report.

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