A series of rate rises have hit a number of property trusts quick hard over the past year. The disappearance of the “Bond Proxy” plus rising interest repayments all have conspired against our nation's largest collective of property owners, the REITs sector.
While we all know in our investing hearts that calling an end to the listed real estate market is folly, one can't help but feel nervous about what the current environment will do to prices longer term.
However, for this article I have decided to focus on two REITS that are future proof in the sense that they don’t require a total re-engineering of their asset base they are aligned with a growing thematic , and they are not exclusively involved in warehouses!
I am talking about the theme of “people” (remember us?!?) and two trusts that are leveraged to people are Arena REIT No 1 (ASX:ARF) and Charter Hall Social Infrastructure REIT (ASX:CQE) . Both have experienced big price pullbacks from highs, however the pullback could create opportunities for savvy long term investors looking for stocks with a ‘people’ thematic, which looks positive over a multi-year timeframe.
I have held these stocks before, and will likely hold again, given the right conditions. With recent pullbacks it is tempting. So how do they look at the moment?
ASX: ARF Arena REIT
StockRank 80
Quality Rank 85
A$3.17
Price from all time high (close): -37.2%
Dividend Yield (forecast): 5.6%
Arena REIT No 1 (ASX:ARF) is a real estate investment trust (REIT). They develop, own and manage social infrastructure properties such as childcare and healthcare.
It is important to stress here that they own the properties... they do not run individual centres or sites.
They own 272 properties all across Australia to the value of $1.57 Billion. The vast majority of those are early learning child care centres, but they also own 9 healthcare centres. Their weighted average lease expiry is 19.3 years, which is very strong relative to other REITs and should provide some comfort to investors on the Tennant profile.
Because as well as providing essential services to the community, the growing sectors ARF are focused on have favourable demographic and economic trends, plus bi-partisan government support.
Following recent…
