Property is a nice, stable inclusion for an income portfolio and National Storage REIT (NSR) has been a top performing property trust on the ASX, importantly, offering a different exposure for investors outside of traditional residential or commercial property. We think that’s important, insofar as most Australians have a lot of wealth tied to residential property and when looking to diversify into stocks, adding more exposure to residential exposure is not ideal. Having said that, NSR is now on the expensive side, trading on a cap rate of ~4.5%. The cap rate is the return the property (or portfolio of properties) will spin off relative to its value expressed as a percentage. From a yield perspective, NSR is expected to generate 3.53% over the coming 12 months, which is unfranked. Ultimately, we are looking for other alternatives in the property space to switch into as NSR trades around $2.60.
MM is considering taking profit on NSR around $2.60
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