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MARKETS SPECTATOR: AREIT appeal

State Street Global Advisors says Australia's real estate investment trust sector is in better shape than it was pre-GFC.
By · 6 Jun 2013
By ·
6 Jun 2013
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The S&P/ASX200 Real Estate Index has slid 11 per cent since May 21 as investors have taken profits on yield stocks such as real estate investment trusts.

Amanda Skelly at fund manager State Street Global Advisors says the sector is in a healthier position than it was prior to the collapse of Lehman Brothers in September 2008 that sparked the global financial crises.

“I don’t think the sector is in a bubble,” Skelly told Markets Spectator. “We think yield opportunities are still there”.

Yields in the AREIT sector are still at 4-6 per cent, she says. Net asset to debt ratios are on average 26 per cent for AREITs compared with 36 per cent pre the global financial crises, Skelly says. She says AREITs are a good investment for those with an investment horizon of five to seven years.

At 1141 AEST the S&P/ASX200 Real Estate Index was down 0.7 per cent to 1017.20. The S&P/ASX200 Index had declined 40.606, or 0.8 per cent, to 4794.60.

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