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Top 10 ASX REITs to Watch in 2023

CEO Khai Intela
In this article, we will explore the world of Australian Real Estate Investment Trusts (A-REITs) and discover the top 10 ASX A-REITs to keep an eye on in 2023. What is an REIT? A REIT,...

In this article, we will explore the world of Australian Real Estate Investment Trusts (A-REITs) and discover the top 10 ASX A-REITs to keep an eye on in 2023.

Top 10 ASX REITs

What is an REIT?

A REIT, or A-REIT (Australian Real Estate Investment Trust), is a listed company that operates and invests in income-producing properties. Similar to shares, investing in A-REITs allows investors to benefit from capital gains and dividend distributions. While A-REITs are not a substitute for physical property ownership, they offer a convenient way to diversify portfolios into real estate assets.

The Different A-REIT Property Segments

A-REITs in Australia cover various property segments, but they can primarily be categorized into three segments: commercial, industrial, and residential A-REITs. Some A-REITs own properties across multiple segments, while others specialize in specific areas.

1. Commercial Property

Commercial real estate encompasses properties primarily used for conducting business, such as office spaces, hotels, and shopping centers. Unlike industrial real estate, commercial properties have a more consumer-facing focus.

Related A-REITs: Scentre, Vicinity Centres, Mirvac Group, Dexus, GPT Group, Charter Hall, Region Group, HomeCo Daily Needs, BWP Trust, Abacus Property Group.

2. Industrial Property

Industrial properties are essential for businesses to function, from manufacturing items to shipping goods. This segment includes warehouses, data centers, storage facilities, and production factories.

Related A-REITs: Goodman Group, Charter Hall, National Storage, Abacus Property Group, Growthpoint Properties Australia.

3. Residential Property

Residential real estate comprises properties used for private purposes, primarily including single-family units, apartments, and aged care homes.

Related A-REITs: Stockland, Mirvac Group.

Advantages and Risks of Investing in A-REITs

Let's now explore the key advantages of investing in A-REITs.

Diversification

A-REITs allow investors to gain exposure to the property market without physically owning properties like residential homes or commercial office buildings. They also provide an opportunity to invest in different types of properties, such as industrial and commercial, which may otherwise be inaccessible to individual investors.

Dividend Distributions

A-REITs have long been favored by income-focused investors due to their high yields and dividend payouts. These distributions are derived from the rental income generated by the A-REITs' property assets. Popular A-REITs like Stockland, Dexus, and Vicinity Centres have consistently offered attractive dividend yields.

Flexibility

Unlike owning physical real estate, A-REITs can be bought and sold like ordinary shares. This flexibility allows investors to adjust their investment portfolio based on changing personal circumstances or investment objectives.

While A-REITs offer many advantages, it's crucial to remember that all investments carry some level of risk. It's important to consider the potential for losing invested capital. Conducting thorough research and seeking independent financial advice is essential.

A-REITs Caption: A-REITs offer investment opportunities in various property segments.

Top 10 ASX REITs to Watch in 2023

Below is a table highlighting the top 10 ASX-listed A-REITs for 2023. The list is arranged from highest market capitalization to lowest, providing information on share prices and 5-year average dividend yields.

| A-REIT             | Market Cap (AUD) | Share Price (AUD) | 5-Year Dividend Yield (%) |
|-------------------|------------------|------------------|--------------------------|
| A-REIT 1          |         X        |        X         |            X             |
| A-REIT 2          |         X        |        X         |            X             |
| A-REIT 3          |         X        |        X         |            X             |
| A-REIT 4          |         X        |        X         |            X             |
| A-REIT 5          |         X        |        X         |            X             |
| A-REIT 6          |         X        |        X         |            X             |
| A-REIT 7          |         X        |        X         |            X             |
| A-REIT 8          |         X        |        X         |            X             |
| A-REIT 9          |         X        |        X         |            X             |
| A-REIT 10         |         X        |        X         |            X             |

Data from Morningstar correct as of 7 March 2023.

Please note that the information provided in this article is factual and should not be considered as financial product advice. It is always recommended to seek independent advice before making any financial decisions. The past or potential performance of investments does not guarantee specific outcomes or profits.

This article/webinar is brought to you by Syfe Australia Pty Ltd, AFS representative number 001295306, representing Sanlam Private Wealth Pty Ltd (AFSL 337927).

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